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You are operating an old machine that is expected to produce a cash inflow of $ 2 , 1 5 0 in each of the

You are operating an old machine that is expected to produce a cash inflow of $2,150 in each of the next two years before it fails. You can replace it now with a new machine that costs $34,370 which will provide a cash flow of $9,380 a year for six years. The discount rate is 8%, find the EAC of the new machine. Should you replace your equipment now or later?

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