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The Lesseig Company has an opportunity to invest in one of two mutually exclusive machines that will produce a product the company will need for
The Lesseig Company has an opportunity to invest in one of two mutually exclusive machines that will produce a product the company will need for the aext 8 vears. Machine A has an atter-tax cost of $9.5 milion but wil provide after-tax inflows of $4.3 milion per year for 4 years. it Machine A were replaced, its after-tax cost would be $11 milion due to inflation and its after-tax cach infows would increase to $4.8 malion due to production efficiencies. Machine 8 has an after-tax cost of $14.4milfion and wai provide after-tax inflows. of $3.9 mition per year for 8 years. If the WACC is 5%, which machine should be acquired? Explaln. Enter your answers in millions, For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermedate-calculations. Round your answeis to two decinal places. Machine is the better project and wat increve the company's value by $ miliens, rather than the 5 millons created br Machine
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