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You can continue to use your less efficient machine at a cost of $8, 000 annually for the next five years. Alternatively, you can purchase
You can continue to use your less efficient machine at a cost of $8, 000 annually for the next five years. Alternatively, you can purchase a more 5-year efficient machine for $12, 000 plus $5, 000 annual maintenance. At a cost of capital of 15%, you should: A) Buy the new machine and save $388 in equivalent annual costs. B) Keep the old machine and save $388 in equivalent annual costs. C) Keep the old machine and save $580 in equivalent annual costs. D) Buy the new machine and save $600 in equivalent annual costs
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