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Your firm has to replace one of its fender-bender machine. One of your financial wizards has determined that the appropriate discount rate for the machine
Your firm has to replace one of its fender-bender machine. One of your financial wizards has determined that the appropriate discount rate for the machine cash flows is 10%. your firm has two alternatives: A: Fender-bender machine A costs exist400,000 and produces annual net cash flows of exist200,000 at the end of each year of its six years of life. B: Fender-bender machine B costs exist200,000 but has only a two-year life. However, it produces a exist300,000 annual cash flow at the end of each of these two years. Calculate the equivalent Annual Annuity (also, known as "the Equivalent Annual Annuity Cash Flow": EAA)
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