Question: Need help with part b. Thank you, Problem 6-8 Equivalent annual cash flows Machines A and B are mutually exclusive and are expected to produce
Need help with part b. Thank you,
Problem 6-8 Equivalent annual cash flows Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows ($ thousands) C -118 -72 Machine +128 +106 +100 +72 +78 The real opportunity cost of capital is 9% a. Calculate the NPV of each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g 123,456. Round your answers to the nearest whole dollar amount.) Machine NPV 76 $ 146.07 b. Calculate the equivalent annual cash flow from each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g. 123,456. Round your answers to the nearest whole dollar amount.) Machine Cash Flow c. Which machine should you buy? Machine A Machine B
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