Alpha Geek

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    Polytechnic State University Sanluis
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Category > Accounting Posted 09 May 2017 My Price 5.00

Option to Wait Your company is deciding whether

Option to Wait Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $425,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $2,600,000. The cost of the machine will decline by $230,000 per year until it reaches $1,450,000, where it will remain. If your required return is 12 percent, should you purchase the machine? If so, when should you purchase it?

 

Answers

Alpha Geek
(8)
Status NEW Posted 09 May 2017 01:05 PM My Price 5.00

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file 1494337794-Answer.docx preview (215 words )
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