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A company is considering expanding their production capabilities with a new machine that costs $ 3 1 , 0 0 0 and has a projected
A company is considering expanding their production capabilities with a new machine that costs $ and
has a projected lifespan of years. They estimate the increased production will provide a constant $ per
year of additional income. Money can earn per year, compounded continuously. Should the company buy
the machine?
A No the present value of the machine is less than the cost by number over the lifetime of the machine.
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