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You have been asked to evaluate two different machines and provide a recommendation to your boss. Machine A costs $165,000 up front, has a 4-year
You have been asked to evaluate two different machines and provide a recommendation to your boss. Machine A costs $165,000 up front, has a 4-year life, and an annual after-tax OCF of negative $10,000 per year. Machine B costs $165,000 up front, has a 4-year life, and an annual after-tax OCF of negative $14,500. If the discount rate is 10 percent, what is the equivalent annual cost of each machine? What machine should you purchase
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