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Unequal cash flows 2.- A company is using a new machine which generates annual cash flows of $3 million per year (at the end of
Unequal cash flows
2.- A company is using a new machine which generates annual cash flows of $3 million per year (at the end of the year). The machine can be used for another 6 years, then it will be worthless. At the end of the 3rd year replacement of some parts has to take place, which will cost $4 million. The interest rate will be 7% during the next 6 years. What is the Present Value of all the cash flows that the machine generates?
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