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1. GoodDeal Inc. is considering purchasing a new inventory management system. The purchase price is $400,000. GoodDeal Inc. will borrow one-quarter of the purc using

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1. GoodDeal Inc. is considering purchasing a new inventory management system. The purchase price is $400,000. GoodDeal Inc. will borrow one-quarter of the purc using equal annual payments over a 6-year period (payments begin one year after taking out the loan). The inventory system is expected to last 10 years and has a salvage value of $200 at that time. Over the 10-year period, GoodDeal Inc. expects to pay IT specialists $100,000 per year to maintain the system but ill $200,000 per year through increased efficiencies. GoodDeal Inc. requires a minimum return of i 0% on investments and can borrow money at 8%. hase price from a bank. The loan is to be repaid What is the annual loan payment amount? a. b, what is the present worth of this investment? What is the decision rule for judging the attractiveness of investments based on present worth? Should the new computer system be purchased? c

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