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Q27) Lobo is a leading manufacturer of positronic brains, a key component in robots. The company is considering two alternative production methods. The costs and
Q27) Lobo is a leading manufacturer of positronic brains, a key component in robots. The company is considering two alternative production methods. The costs and lives associated with each are: Year Method 1 Method 2 $6,700 $9,900 400 620 A W 400 620 400 620 620 Assuming that Lobo will not replace the equipment when it wears out, which should it buy? If Lobo is going to replace the equipment, which should it buy (r= 13%)? Ignore depreciation and taxes in answering
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