A manufacturing company is considering two mutually exclusive machines El and E2 with the following cash...
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A manufacturing company is considering two mutually exclusive machines El and E2 with the following cash flow information: Machine E1 Salvage Machine E2 Salvage Value Cash- Cash- Year Flow Value Flow -$400 -$600 $400 $360 $320 -$300 $200 -$250 -$250 -$250 -$250 -$250 1 2 -$300 $175 -$300 $150 4 $280 $240 Which machine would you recommend if the company needs either machine for only 5 years? Assume a MARR of 12% and either machine would be available at the same cost over the next 5 years. A manufacturing company is considering two mutually exclusive machines El and E2 with the following cash flow information: Machine E1 Salvage Machine E2 Salvage Value Cash- Cash- Year Flow Value Flow -$400 -$600 $400 $360 $320 -$300 $200 -$250 -$250 -$250 -$250 -$250 1 2 -$300 $175 -$300 $150 4 $280 $240 Which machine would you recommend if the company needs either machine for only 5 years? Assume a MARR of 12% and either machine would be available at the same cost over the next 5 years.
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Answer rating: 100% (QA)
Machine E1 This machine seems to work for 3 years only Therefore Machine E1 would be bought at Year 0 and then at Year 3 The first E1 machine will be ... View the full answer
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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