A company is considering buying either Machine A or Machine B. Machine Both machines cost $44,275, but
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A company is considering buying either Machine A or Machine B. Machine Both machines cost $44,275, but Machine A is expected to last 4 years and generate cash flows of $18,885 each year, while Machine B is only expected to last 2 years, but generate cash flows of $33,952 each year. If the WACC is 10%, which machine is the best investment? Calculate the RELEVANT NPV of each investment project, then obtain the difference. That is, enter the NPV of buying Machine A - the NPV of buying Machine B.
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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