Question: Machines A and B are mutually exclusive and are expected to produce the following real cash flows: C3 Cash Flows ($ thousands) Machine C1 C2
Machines A and B are mutually exclusive and are expected to produce the following real cash flows: C3 Cash Flows ($ thousands) Machine C1 C2 A -108 +118 +129 B -128 +118 +129 +141 The real opportunity cost of capital is 9%. a. Calculate the NPV of each machine. (Enter your answers in dollars not in thousands. Round your answers to the nearest whole dollar amount.) NPV Machine A B 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 A Cash Flow B c. Which machine should you buy? Machine A Machine B
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