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Q5 ABC Corporation has the opportunity to buy one of two mutually exclusive machines that will produce computers. Machine-A costs $10 million and generates after-tax

Q5 ABC Corporation has the opportunity to buy one of two mutually exclusive machines that will produce computers. Machine-A costs $10 million and generates after-tax inflows of $2 million per year for 4 years. After 4 years, the machine must be replaced. Machine-B costs $15 million and generates after-tax inflows of $1.5 million per year for 7 years, after which it must be replaced. The cost of capital is 10%. Which machine should be preferred?

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