You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $57,500, has a 5-year life, and has an annual operating cash flow (after-tax) of –$10,100 per year. The Keebler CookieMunster costs $90,500, has a 7-year life, and has an annual OCF (after-tax) of –$8,100 per year. If your discount rate is 11 percent, what is each machine’s EAC? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.
You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $57,500, has a 5-year life, and has an annual operating cash flow (after-tax) of –$10,100 per year. The Keebler CookieMunster costs $90,500, has a 7-year life, and has an annual OCF (after-tax) of –$8,100 per year. If your discount rate is 11 percent, what is each machine’s EAC? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.
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
Section: Chapter Questions
Problem 1PS
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You are evaluating two different cookie-baking ovens. The Pillsbury 707 costs $57,500, has a 5-year life, and has an annual operating cash flow (after-tax) of –$10,100 per year. The Keebler CookieMunster costs $90,500, has a 7-year life, and has an annual OCF (after-tax) of –$8,100 per year. If your discount rate is 11 percent, what is each machine’s EAC? Note: Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.
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