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The management team at Brown and Browne (BnB) is deep in the budgeting process. Strategic goals have been finalized and capital investment are being evaluated.

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The management team at Brown and Browne (BnB) is deep in the budgeting process. Strategic goals have been finalized and capital investment are being evaluated. Every department within BnB can submit potential investments. Predicted future cash flows and initial investment figures are given to the accounting department for evaluation using various capital investment analysis methods. Then the department representatives can present the proposals to the management team. Daryl Baez is a new manager at BnB and just completed his presentation for replacing some aging equipment. He felt prepared and did not expect questions, but the team members had several. Their primary concern is the calculations for future net cash flows. Daryl explained that the vendor provided the figures for reduced operating cost based on the efficiency of the new equipment. Should the management team be concerned about the predictions? What should Daryl do? What would you do

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