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Question & [14 Marks) Trek Minerals is evaluating a new production process Two alternative pieces of equipment are available Alternative P costs R100,000, has 10-year
Question & [14 Marks) Trek Minerals is evaluating a new production process Two alternative pieces of equipment are available Alternative P costs R100,000, has 10-year life, and is expected to generate annual cash indows of R22,000 in each of the 10 years Alternative R costs R85,000, has an 8-year life and is expected to generate annual cash inflows of R18,000 in each of 8 years Trek Mineral's weighted average cost of capital is 12 percent Required Using the equivalent annual annuity method, which alternative should be chosen
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