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(1) A publisher can purchase a new duplicating machine for $500 and the duplicator has a 1 year life. The machine is expected to contribute

(1)A publisher can purchase a new duplicating machine for $500 and the duplicator has a 1 year life. The machine is expected to contribute $550 to the net revenue in the year. What is the expected rate of return?

If the real interest rate at which finds may be borrowed to purchase the machine is 8% , will the publisher choose to invest in the machine?

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