Mountain Fresh Water Company is considering two mutually exclusive machines.Machine A has an up-front cost of $100,000 (CF₀ = -100,000),and it produces positive after-tax cash inflows of $40,000 a year at the end of each of the next six years.Machine B has an up-front cost of $50,000(CF₀ = ?50,000),and it produces after-tax cash inflows of $30,000 a year at the end of the next three years.The company's cost of capital is 10.5%.Based on the equivalent annual annuity,which machine will be chosen? A)Afor$71,687 B)A for $16,702 C)B for $23,954 D)B for $9,718

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The Answer of Mountain Fresh Water Company is considering two mutually exclusive machines.Machine A has an up-front cost of $100,000 (CF₀ = -100,000),and it produces positive after-tax cash inflows of $40,000 a year at the end of each of the next six years.Machine B has an up-front cost of $50,000(CF₀ = ?50,000),and it produces after-tax cash inflows of $30,000 a year at the end of the next three years.The company's cost of capital is 10.5%.Based on the equivalent annual annuity,which machine will be chosen? A)Afor$71,687 B)A for $16,702 C)B for $23,954 D)B for $9,718

Mountain Fresh Water Company Is Considering Two Mutually Exclusive Machines