Question

X Company must replace one of its current machines with either Machine A or Machine B....

X Company must replace one of its current machines with either Machine A or Machine B. The useful life of both machines is seven years. Machine A costs $48,000, and Machine B costs $56,000. Estimated annual cash flows with the two machines are as follows: Year Machine A Machine B

1 $-6,000 $-7,000

2 -8,000 -4,000

3 -8,000 -3,000

4 -8,000 -3,000

5 -6,000 -3,000

6 -5,000 -2,000

7 -4,000 -2,000

If X Company buys Machine B instead of Machine A, what is the payback period (in years)?

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Answer #1

Answer:- (1) Difference between costs = $66ADOO - QUẬ000 = $200 - Differene between cash flows salubriterence $ 8000 cumulati

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