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The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the

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The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the foreseeable future. Machine A costs $8 milion but realizes after-tax inflows of $4.5 million per year for 4 years. After 4 years, the machine must be replaced. Machine B costs $17 million and realizes after-tax inflows of $4 million per year for 8 years; after which it must be replaced. Assume that machine prices are not expected to rise because infiation will be offiset by cheaper components used in the machines. The cost of capital is 13%, Using the replacement chain approach to project analysis, by how much would the value of the company increase if it accepted the better machine? Do not round intermedlate calculations. Enter your answer in milions. For exampie, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places. mintion What is the equivalent annual annuity for each machine? Do not round intermediate calculations. Enter your answers in miliions. For example, an answer of 51.23 milion should be entered as 1.23, not 1,230,000. Round your answers to two decimal places. Machine A: 5 mition Mactine B: s mition

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