A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the...

3.6 Ratings (666 Votes)


GSU-3300
Discount rate	0.0775
Year	0	1	2	3	4	5	6	7	8
Cash flow stream	-104097	25088	25088	25088	25088	25088	25088	25088	25088
Discounting factor	1	1.0775	1.161006	1.250984	1.3479355	1.452401	1.564962	1.686246	1.81693
Discounted cash flows project	-104097	23283.53	21608.84	20054.61	18612.166	17273.47	16031.06	14878.02	13807.91
NPV = Sum of discounted cash flows
NPV GSU-3300 =	41452.6
Where
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor


Equvalent annuity(EAA)=	7145.08

Required rate =Â Â	0.0775
Year	0	1	2	3	4	5	6	7	8
Cash flow stream	0	7145.075	7145.075	7145.075	7145.0749	7145.075	7145.075	7145.075	7145.075
Discounting factor	1	1.0775	1.161006	1.250984	1.3479355	1.452401	1.564962	1.686246	1.81693
Discounted cash flows project	0	6631.16	6154.209	5711.563	5300.7543	4919.494	4565.655	4237.267	3932.498
Sum of discounted future cashflows =	41452.6
Discounting factor =	(1 + discount rate)^(Corresponding period in years)
Discounted Cashflow=	Cash flow stream/discounting factor

Please ask other part seperately

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Other questions asked by students