PS:33

A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firms production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $24,778.00 per year for 8 years and costs $98,160.00. The UGA-3000 produces incremental cash flows of $29,202.00 per year for 9 years and cost $123,542.00. The firms WACC is 7.20%. What is the equivalent annual annuity of the UGA-3000? Assume that there are no taxes.