Question: 35. (10 points) You are operating an old machine that is expected to generate a cash flow of $5,000 in each of the next
35. (10 points) You are operating an old machine that is expected to generate a cash flow of $5,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,000 but is much more efficient and will generate a cash flow of $10,000 a year for 4 years. Calculate the NPV of each machine to determine whether you should replace the old machine now, based on the NPV criteria. This opportunity cost of capital is 15%..
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