Question: Problem #2 Company needs to decide between two machines. Machine A costs 10,000 and produce after tax cash flows of 3,000 per year for 5

Problem #2

Company needs to decide between two machines.

Machine A costs 10,000 and produce after tax cash flows of 3,000 per year for 5 years. No salvage.

Machine B costs 18,000 and produce after tax cash flows of 2,800 per year for 10 years. No salvage.

Discount rate is 8%

Which machine would you recommend?

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