Question: Machines A and B are mutually exclusive and are expected to produce the following real cash flows: Cash Flows ($ thousands) Machine C 0 C

Machines A and B are mutually exclusive and are expected to produce the following real cash flows:

Cash Flows ($ thousands) Machine C0C1C2C3 A 100 +110 +121 B 120 +110 +121 +133

Calculate the NPV of each machine

Calculate the equivalent annual cash flow from each machine

Which machine should you buy?

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