MBA CLASS MANAGERIAL ACCOUNTING show process in excel or paper.

You are considering two alternative machines,

Machine A and Machine B, for a manufacturing process. One of the machines, Machine A, costs $39,000 to set up and $8,000 per year to operate, but It must be completely replaced every 4 years, and it has no salvage value. Assuming the cost of capital is 12.2%, what is the equivalent annual cost of the machine?

Question 9 options:

	$18,344
	$19,294
	$20,894
	$22,094
	$23,594
	$25,294

You are considering two mutually exclusive projects with unequal lives. One of the projects has an up-front cost of $46,000 (CF0= -46,000) and produces positive after-tax cash inflows of $18,000 a year at the end of each of the next 4 years. Assuming the cost of capital is 9.8%, what is the equivalent annual annuity of the project?

Question 8 options:

	$3,551
	$4,481
	$5,051
	$5,891
	$6,761
	$7,631