Question: Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Cash Flows ($ thousands) C1 Ca C3 C2
Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Cash Flows ($ thousands) C1 Ca C3 C2 Machine A +100 -118 +128 B -72 +106 +72 +78 The real opportunity cost of capital is 9% a. Calculate the NPV of each machine, (Enter vour answers in dollars not in thousands. Round your answers to the nearest whole dollar amount) Machine NPV A b. Calculate the equivalent annual cash flow from each machine. (Enter your answers in dollars not in thousands. Round your answers to the nearest whole dollar amount.) Machine Cash Flow A c. Which machine should you buy? Machine A O Machine B
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