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Vandalay Industries is considering the purchase of a new machine for the production of latex Machine A costs -$3,100,000 and will last for six years.

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Vandalay Industries is considering the purchase of a new machine for the production of latex Machine A costs -$3,100,000 and will last for six years. The annual after tax cash flow (i.e., cost) is -$3,023,017 Machine B costs -$6,100,000 and will last for nine years. The annual after tax cash flow is -$2,502,528 The required return is 10 percent If the company plans to replace the machine when it wears out on a perpetual basis, which machine should you choose? +

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