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Please show hand writen work! 3) The Lake Erie Machine Company is considering the purchase of a new machining center. Two models are available, model
Please show hand writen work!
3) The Lake Erie Machine Company is considering the purchase of a new machining center. Two models are available, model A and model B, and each has a five-year life. Their cash flows are given in the table below. Assuming an interest rate of 10% per year, compounded annually, which model should Lake Erie Machine purchase based on economic factors only? End of Year WNO Model A Cash Flow -$30,000 10,000 10,000 10,000 10,000 Model B Cash Flow $30,000 30,000 5000 3000 2000 Step by Step Solution
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