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Your company is comparing two machinery investments: A and B. Your company's real Minimum Attractive Rate of Return (MARR) is 9%. Average annual inflation rate

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Your company is comparing two machinery investments: A and B. Your company's real Minimum Attractive Rate of Return (MARR) is 9%. Average annual inflation rate is 2.75%. The properties of these investments are provided in the following table (all dollar values are in constant dollars): B Initial Cost $95,000 $135,000 Annual Maintenance cost $21,000/year $5,500/year 4,500 units/year Annual Sales 4,500 units/year Production unit cost $15/unit $10/unit $40/unit $40/unit Product unit sale price Salvage value after 5 years $65,000 $80,000 CCA Rate 30% 30% Service life 3 years 3 years For both alternatives, answer the following questions considering applicable taxes whenever possible: a] Provide the before-tax cash flow diagrams for both alternatives in current dollars. b] Calculate the NPW of both alternatives taking into account all taxes at a tax rate of 40% (i.e., for after-tax cash flow). Half-year rule applies. c] Which alternative is economically better? Your company is comparing two machinery investments: A and B. Your company's real Minimum Attractive Rate of Return (MARR) is 9%. Average annual inflation rate is 2.75%. The properties of these investments are provided in the following table (all dollar values are in constant dollars): B Initial Cost $95,000 $135,000 Annual Maintenance cost $21,000/year $5,500/year 4,500 units/year Annual Sales 4,500 units/year Production unit cost $15/unit $10/unit $40/unit $40/unit Product unit sale price Salvage value after 5 years $65,000 $80,000 CCA Rate 30% 30% Service life 3 years 3 years For both alternatives, answer the following questions considering applicable taxes whenever possible: a] Provide the before-tax cash flow diagrams for both alternatives in current dollars. b] Calculate the NPW of both alternatives taking into account all taxes at a tax rate of 40% (i.e., for after-tax cash flow). Half-year rule applies. c] Which alternative is economically better

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