Question

You are analyzing two machines. With the first machine, you would owe $10,000 for six years....

You are analyzing two machines. With the first machine, you would owe $10,000 for six years. With
the second machine you would owe $7,000 one year from now; $9,000 two years from now; $11,000
three years from now; $13,000 four years from now; and $20,000 five years from now. Using a discount
rate of 6%, compute the net present value and annuity equivalent for each machine. Which machine
would you choose?
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