Thompson Manufacturing must choose between two types of furnaces to install.Model A has a 6-year life,and an NPV of $5,000.Model B has a 5-year life,and an NPV of $4,200.The relevant discount rate is 12%.Which model should be chosen? What's the annual cash flow from that model?
A) Model B; $1,165
B) Model B; $840
C) Model A; $833
D) Model A; $1,216
Correct Answer:
Verified
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