Hi all, Can someone please answer this question. Please, list all steps! thanks! Machines A and...

Hi all,

Can someone please answer this question. Please, list all steps! thanks!

Machines A and B are mutually exclusive and are expected to produce the following real cash flows:

Cash Flows ($ thousands)
Machine	C₀	C₁	C₂	C₃
A	–102	+112	+123
B	–122	+112	+123	+135

The real opportunity cost of capital is 12%.

a. Calculate the NPV of each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g. 123,456. Round your answers to the nearest whole dollar amount.)

Machine	NPV
A	$
B	$

b. Calculate the equivalent annual cash flow from each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g. 123,456. Round your answers to the nearest whole dollar amount.)

Machine	Cash Flow
A	$
B	$

c. Which machine should you buy?

	Machine A
	Machine B

Expert Solution

jeff jeffy answered 7 months ago

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