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Question 27 Machine B is expected to produce the following real cash flows: Machine B CO -120 C 1 130 Cash flows C2 141 15.3
Question 27 Machine B is expected to produce the following real cash flows: Machine B CO -120 C 1 130 Cash flows C2 141 15.3 Machine C was purchased five years ago and produces an annual real cash flow of $75,000. It has no salvage value but is expected to last another five years. The company can replace machine C with machine B either now or at the end of five years. The real opportunity cost of capital is 10%. Which should it do, replace now or in 5 years? A. The company is indifferent between replacing Machine C now or in 5 years B. The company should replace Machine C now C. The company should wait and replace Machine C at the end of five years D. There is not enough information to determine whether the company should wa E. I choose not to
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