You are operating an old machine that is expected to produce a cash inflow of $7,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $22.000 but is much more efficient and will provide a cash flow of $13.000 a year for 4 years: Calculate the equivalent annual cost of the new machine if the discount rate is 16%.

Answer rating: 100% (QA)

The net present value NPV of the cash inflow from the new machine needs to be calculated first We wi... View the full answer