Description of this paper

You are considering buying a new machine for your factory.

Description

solution


Question

You are considering buying a new machine for your factory. You estimate that your profits will increase by $25,000 over its first year in operation (for simplicity assume profits are received at the end of each year), $20,000 over its second year, $10,000 over its third year, at which time you will be able to sell it for $5,000. If interest rates are 10%, what is the maximum amount you should pay for this machine?;a. $50,525.92;b. $46,769.35;c. $60,000.00;d. $51,769.35

 

Paper#30584 | Written in 18-Jul-2015

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