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you have to buy a new machine and must decide between two competing alternatives. Machine A costs $15,000, has $1,600 in annual operating costs, produces an annual benefit of $8,000, has a useful life of 7 years, and can be sold for salvage at the end of its useful life for $3,000. Machine B costs $25,000, has $400 in annual operating costs, produces an annual benefit of $13,000, has a useful life of 10 years, and can be sold for salvage at the end of its useful life for $6,000. Assume an interest rate of 12%. Using annual cash flow analysis, what is the difference in (EUAB - EUAC) between Machine A vs. machine B?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9476093

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