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Business, 13.12.2019 23:31 smokey13

Faleye consulting is deciding which of two computer systems to purchase. it can purchase state-of-the-art equipment (system a) for $23,000, which will generate cash flows of $7,000 at the end of each of the next 6 years. alternatively, the company can spend $13,000 for equipment that can be used for 3 years and will generate cash flows of $7,000 at the end of each year (system b). if the company’s wacc is 5% and both "projects" can be repeated indefinitely, which system should be chosen, and what is its eaa?

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