Question: Machines A, B, C, and D are mutually exclusive are expected to produce real cash flows with the real opportunity cost of capital is 12%.
Machines A, B, C, and D are mutually exclusive are expected to produce real cash flows with the real opportunity cost of capital is 12%. Machine A Year 0 = -$1,000 Year 1 = $1,100 Year 2 = $1,210 Machine B Year 0 = -$1,200 Year 1 = $1,100 Year 2 = $1,210 Year 3 = $1,330 Machine 4 Year 0 = -$5000 Year 1 = $0 Year 2 = $500 Year 3 = $1,000 Year 4 = $2,000 Year 5 = $3,000 Machine D Year 0 = -$6,000 Year 1 = $500 Year 2 = $1,000 Year 3 = $2,000 Year 4 = $3,000 Year 5 = $4,000 a. Calculate the NPV of each machine b. Calculate the equivalent annual cash flows for each machine c. As the machines are mutually exclusive, which machine should you buy? d. If the machines are independent, which machine(s) should you buy? please i want to know for sure A and B and C but the most important part i need part B thank you
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