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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
Comparing Mutually Exclusive Projects Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,900,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are $2,100,000 per year. Machine B costs $5,400,000 and will last for nine years. Variable costs for this machine are 30 percent and fixed costs are $2,400,000 per year. The sales for each machine will be $12 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on a perpetual basis, which machine should you choose?
Mac-----------hin-----------e A----------- ( -----------cos-----------t o-----------f m-----------ach-----------ine-----------=39-----------000-----------00)----------- Op-----------era-----------tin-----------g c-----------ash-----------flo-----------w=S-----------ale-----------s P-----------ric-----------e-V-----------ari-----------abl-----------e C-----------ost------------Fi-----------xed----------- Co-----------st=-----------120-----------000-----------00------------120-----------000-----------00*-----------0.3-----------5-2-----------100-----------000----------- 57-----------000-----------00 -----------Ope-----------rat-----------ing----------- ca-----------shf-----------low-----------