Write a constraint to ensure that if machine 4 is used, then machine 1 will not be used

What motivation is provided for managers not to follow the relaxed strategy of long- versus short-term financing?

A) short-term investment income is often unattractive B) transaction costs are required to continually obtain financing C) long-term financing has burdensome tax consequences D) investment opportunities must frequently be ignored

FITCO is considering the purchase of new equipment. The equipment costs $350,000, and an additional $110,000 is needed to install it. The equipment will be depreciated straight-line to zero over a five-year life. The equipment will generate additional annual revenues of $265,000, and it will have annual cash operating expenses of $83,000. The equipment will be sold for $85,000 after five years. An inventory investment of $73,000 is required during the life of the investment. FITCO is in the 40% tax bracket and its cost of capital is 10%. What is the project NPV?

A. $52,122. B. $64,090. C. $97,449.