Question: I will rate life saver!! Machine B is expected to produce the following real cash flows: Machine C was purchased five years ago for $200,000

 I will rate life saver!! Machine B is expected to produce

I will rate life saver!!

Machine B is expected to produce the following real cash flows: Machine C was purchased five years ago for $200,000 and produces an annual real cash flow of $80,000. It has no salvage value but is expected to last another five years. The company can replace machine C with machine B either now or at the end of five years. The real opportunity cost of capital is 11%. When should the company replace machine C ? Replace now Replace after 5 years

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