Machine A Machine B First cost, $ - 15,000 -25,000 Annual operating cost, $ per year Salvage value, $ Life, years -1,600 -400 3,000 6,000 3 6

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 5P
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For the cash flows shown and in preparation for a PW-based rate of return analysis, determine the incremental cash flow between machines B and A
for (a) year 0, (b) year 3, and (c) year 6.

Machine A
Machine B
First cost, $
- 15,000
-25,000
Annual operating cost,
$ per year
Salvage value, $
Life, years
-1,600
-400
3,000
6,000
3
6
Transcribed Image Text:Machine A Machine B First cost, $ - 15,000 -25,000 Annual operating cost, $ per year Salvage value, $ Life, years -1,600 -400 3,000 6,000 3 6
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