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Problem #2 Company needs to decide between two machines. Machine A costs 10,000 and produce after tax cash flows of 3,000 per year for 5
Problem #2
Company needs to decide between two machines.
Machine A costs 10,000 and produce after tax cash flows of 3,000 per year for 5 years. No salvage.
Machine B costs 18,000 and produce after tax cash flows of 2,800 per year for 10 years. No salvage.
Discount rate is 8%
Which machine would you recommend?
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