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Use the following information for the next two questions: Toya Motors needs a new machine for production of its 2000 models. The financial vice president

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Use the following information for the next two questions: Toya Motors needs a new machine for production of its 2000 models. The financial vice president has appointed you to do the capital budgeting analysis. You have identified two different machines that are capable of performing the job. You have completed the cash flow analysis, and the expected net cash flows are as follows: Expected Net Cash Flow Machine B Machine O Year -$5,000 2,085 2,085 -$5,000 3 2,085 2,085 9,677 5. The firm's required rate of return is uncertain at this time, so you construct NPV profiles to assist in the final decision. At what discount rate do the profiles for Machines B and O cross? 6. If the required rate of return for both projects is 14 percent at the time the decision is made, the IRR of Machine B is 24.14%, and the IRR of Machine O is 17.95%, which project would you choose? Use the following information for the next two questions: Toya Motors needs a new machine for production of its 2000 models. The financial vice president has appointed you to do the capital budgeting analysis. You have identified two different machines that are capable of performing the job. You have completed the cash flow analysis, and the expected net cash flows are as follows: Expected Net Cash Flow Machine B Machine O Year -$5,000 2,085 2,085 -$5,000 3 2,085 2,085 9,677 5. The firm's required rate of return is uncertain at this time, so you construct NPV profiles to assist in the final decision. At what discount rate do the profiles for Machines B and O cross? 6. If the required rate of return for both projects is 14 percent at the time the decision is made, the IRR of Machine B is 24.14%, and the IRR of Machine O is 17.95%, which project would you choose

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