Question: A company is considering replacing a machine that was purchased five years ago for 2 5 0 0 0 0 and produces an annual real
A company is considering replacing a machine that was purchased five years ago for and produces an annual real cash flow of It has no salvage value but is expected to last another five years. The company can replace the machine with a new one that produces an annual cash flow of either now or at the end of five years. When should it replace the machine?Assume that the real opportunity cost of capital is NowAt the end of five years
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