You are evaluating two different cookie-baking ovens the, Ask an Expert

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You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $61,000, has a 5-year life, and has an annual OCF (after tax) of –$10,800 per year. The Keebler CookieMunster costs $94,000, has a 7-year life, and has an annual OCF (after tax) of –$8,800 per year. If your discount rate is 13 percent, what is each machine’s EAC?

32. The level of capital per person would increase if

the average saving rate were higher.

the output-to-capital ratio increased.

the depreciation rate increased.

Both A and B.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91611037

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