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Rib? & Wings-R-Us is considering the purchase of a new smoker oven for cooking? barbecue, ribs, and wings. It is looking at two different ovens. The first is a relatively standard smoker and would cost $50,000 ?, last for 8 ?years, and produce annual cash flows of $16,000 per year. The alternative is the?deluxe, award-winning? Smoke-alator, which costs $78,000?and, because of its patented humidity? control, produces the? “moistest, tastiest barbecue in the? world.” The? Smoke-alator would last for 11 years and produce cash flows of $23,000 per year. Assuming a required rate of return of 10 percent on both?projects, compute their equivalent annual annuities ?

The EAA of the standard smoker is ?

The EAA of the? Smoke-alator is ?

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Rib? & Wings-R-Us should purchase the . ( standard smoker or smoke-alator)

 
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