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USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING TWO (2) QUESTIONS GSU Motor Works needs to select an assembly line for producing their new SUV.
USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING TWO (2) QUESTIONS GSU Motor Works needs to select an assembly line for producing their new SUV. They have two options: - Option XYZ is a highly automated assembly line that has a large up-front cost but low maintenance cost over the years. This option will cost $114 million today with a yearly operating cost of $40 million. The assembly line will last for 6 years and be sold for $48 million in 6 years. - Option GHI is a cheaper alternative with less technology, a longer life, but higher operating costs. This option will cost $168 million today with an annual operating cost of $32 million. This assembly line will last for 10 years and be sold for $23 million in 10 years. The firm's cost of capital is 16%. Assume a tax rate of zero percent. 48. The equivalent annual cost (EAC) for Option XYZ is $ million. 49. The equivalent annual cost (EAC) for Option GHI is $ million
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