Solved: Discounted-cash-flow models in decision-making process, Finance Basics

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Discounted-cash-flow models in decision-making process

Problem:

Some capital-budgeting choices require managers to decide between upgrading high-technology research equipment and not upgrading.

Respond to the following questions:

1. How would financial managers at a drug manufacturing company use discounted-cash-flow models in their decision-making process?

2. If the equipment is not replaced, what would be the impact on future operating cash flows used in the model?

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Finance Basics: Discounted-cash-flow models in decision-making process

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