Equipment Purchase with Inflation: Refer to the data in case 15-44. Suppose the after-tax rate of return
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Equipment Purchase with Inflation: Refer to the data in case 15-44. Suppose the after-tax rate of return of 15 percent is to be in real terms and the expected inflation rate is 8 percent per year. What would be the net present value of the equipment purchase? What is the amount Transcontinental would pay to make the NPV equal to zero?
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