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Machines A and B are mutually exclusiveand are expected to produce the following real cash flows:Cash Flows ($ thousands)MachineC0C1C2C3C4A-117115135150B-125110150-50200The real opportunity cost of capitalis 10%.Calculate the NPV of each machine. Calculate the equivalent annual cash flow from each machine. Which machine should you buy? Justify your answer. When appraising mutually exclusive investments in plant andequipment, financial managers calculate the investments' equivalentannual costs and rank the investments on this basis. Criticallydiscuss why this is necessary and why not just compare theinvestments' NPVs?