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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 process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $26,700.00 per year for 8 years and costs $104,996.00. The UGA-3000 produces incremental cash flows of $28,979.00 per year for 9 years and cost $123,541.00. The firm’s WACC is 7.37%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes. Answer format: Currency: Round to: 2 decimal places.

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 $26,700.00 per year for 8 years and costs $104,996.00. The UGA-3000 produces incremental cash flows of $28,979.00 per year for 9 years and cost $123,541.00. The firm’s WACC is 7.37%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes. Answer format: Currency: Round to: 2 decimal places.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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 process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $26,700.00 per year for 8 years and costs $104,996.00. The UGA-3000 produces incremental cash flows of $28,979.00 per year for 9 years and cost $123,541.00. The firm’s WACC is 7.37%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.

Answer format: Currency: Round to: 2 decimal places.

 

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