Little LampLighter Inc has a book value of $10 million in debt; it's bonds are trading at $900 and there are 11,000 outstanding. It also has a market value of equity of $25 million. Shareholders require a 14% return on their shares and creditors require a 8% before-tax return on their investment. The weighted average return required by investors in Spock Enterprises is percent.

You are considering the purchase of one of two machines used in your manufacturing plant. machine 1 has a life of two years, costs $20,000 initially, and then $4,000 per year in maintenance costs. machine 2 costs $25,000 initially, has a life of three years, and requires $3,500 in annual maintenance costs. either machine must be replaced at the end of its life with an equivalent machine. using eac which is the better machine for the firm