A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the...
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A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm's production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $26,686.00 per year for 8 years and costs $102,847.00. The UGA-3000 produces incremental cash flows of $27,381.00 per year for 9 years and cost $125,141.00. The firm's WACC is 8.53%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes. A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm's production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $26,686.00 per year for 8 years and costs $102,847.00. The UGA-3000 produces incremental cash flows of $27,381.00 per year for 9 years and cost $125,141.00. The firm's WACC is 8.53%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.
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SOLUTION GSU3300 costs 102847 Cash flows 26686 per year Cash flow period ... View the full answer
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