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Business, 05.05.2020 18:35 mani1682

A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm’s production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,010.00 per year for 8 years and costs $99,984.00. The UGA-3000 produces incremental cash flows of $28,975.00 per year for 9 years and cost $123,069.00. The firm’s WACC is 9.63%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.

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A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm’s production...
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