NPV and Cash Flows
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Machine A and B are mutually exclusive and are expected to produce the follwing real cash flows. The real opportunity cost of capital is 10%.
Cash Flows (Thousands)
Machine Co C1 C2 C3
A -100 110 121 0
B -120 110 121 133
Calculate the NPV of each machine.
Calculate the equivalent annual cash flow from each machine.
Which machine should you buy?
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Solution Summary
This solution calculates the NPV and cash flows.
Education
- B. Sc., University of Nigeria
- M. Sc., London South Bank University
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