# NPV and Cash Flows

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?

https://brainmass.com/economics/finance/npv-cash-flows-465870

#### Solution Summary

This solution calculates the NPV and cash flows.

$2.19