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

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Unequal Lives 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. Macnine A costs 10 millon but realizes after-tax inflows of $4 million per year for 4 years. After 4 years, the machine must be replaced, Machine B costs $15 million and realizes after-tax inflows of $3.5 millian per year for 8 years, after which it must be replaced. Assume that machine prices are not expected to rise because inflation will be offset by cheaper components used in the macines. The cost of capital is 10%. a. Using the replacement chain approach to project analys s, by how much would the value of the company Increase If it accepted the better machine? Enter your answer in millions. For example, an answer of s1.23 mi on should be entered as 1.23, not 1,230,000. Do not round intermediate calculations. Round your answer to two decimal places. million b. what is the equivalent annual annuity for each machine? Enter your answers in millions. For example, an answer of $1.23 millon should be entered as 1.23, not 1,230,000. Do not round intermediate calculations. Round your answers to two decimal places. Machine A: s Machine B: $ million million

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