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s 2. A firm has two altematives for improvement of its current production system. The data are as follows: Machine A p 40,000 12,000 4

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s 2. A firm has two altematives for improvement of its current production system. The data are as follows: Machine A p 40,000 12,000 4 years 1,000 Machine B -P: 55,000 10,000 6 years 500 Initial Installment Cost Annual Operating Cost Service Life Salvage Value If the firm's interest rate is 10%, which altemative should be selected when using the following methods? a) Annual Equivalent Cost Method b) Present Worth Method c) Annual Cost Method Please include cash flow diagram

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