Managers of Coronado Embroidery have decided to purchase a new monogram machine and are considering two...

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Managers of Coronado Embroidery have decided to purchase a newmonogram machine and are considering two alternative machines. Thefirst machine costs $114,000 and is expected to last five years.The second machine costs $182,000 and is expected to last eightyears. Assume that the opportunity cost of capital is 8 percent.What is the equivalent annual cost for each system? (Do not roundintermediate calculations. Round final answers to 2 decimal places,e.g. 2.75.) Equivalent Annual Cost First machine $ Second machine $Which machine should Coronado Embroidery purchase? CoronadoEmbroidery should purchase the machine.

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Machine 1 Discount rate 8000 Year 0 1 2 3 4 5 Cash flow stream 114000000 0000 0000 0000 0000 0000 Discounting factor 1000 1080 1166 1260 1360 1469 Discounted cash flows project 114000000 0000 0000 0000 0000 0000 NPV Sum of discounted cash flows NPV Machine 1 11400000 Where Discounting factor 1 discount rateCorresponding period in years Discounted See Answer

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Managers of Coronado Embroidery have decided to purchase a newmonogram machine and are considering two alternative machines. Thefirst machine costs $114,000 and is expected to last five years.The second machine costs $182,000 and is expected to last eightyears. Assume that the opportunity cost of capital is 8 percent.What is the equivalent annual cost for each system? (Do not roundintermediate calculations. Round final answers to 2 decimal places,e.g. 2.75.) Equivalent Annual Cost First machine $ Second machine $Which machine should Coronado Embroidery purchase? CoronadoEmbroidery should purchase the machine.