The final two mutually exclusive projects that Caledonia is considering involve mutually exclusive pieces of

The final two mutually exclusive projects that Caledonia is considering involve mutually exclusive pieces of machinery that perform the same task. The two alternatives available provide the following set of after-tax net cash flows:

Year Equipment A Equipment B

0 -$100,000 -$100,000

1 65,000 32,500

2 65,000 32,500

3 65,000 32,500

4 32,500

5 32,500

6 32,500

7 32,500

8 32,500

9 32,500

The equipment has an expected life of 3 years, whereas equipment B has an expected life of 9 years. Assume req'd Rate of return is 14%

File name: Caledonia-is.xls File type: application/vnd.ms-excel Price: $5