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The company is choosing between machine A and B ( they are mutually exclusive and the company can only pick one ) . The initial
The company is choosing between machine A and B they are mutually exclusive and the company can only pick one The initial cost of machine A is $ and it will last for years before it needs to be replaced. The cost of operating machine A each year is $ The initial cost of Machine B is $ and it will last for years before it needs to be replaced. The cost of operating machine B is $ in cash flow per year. If the required rate of return is
a Calculate the year and year annuity factors at annual interest.
b Using the annuity factors, find the PV of Machine A and Machine B including all costs initial operating
c Which machine is a better choice for the company after considering the different lives of the projects? Note: be sure to use the equivalent annual annuity method
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