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1. On January 1, 2009, you are considering purchasing a machine that costs $11,500 but that will generate cash payments of $3,000 per year for

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1. On January 1, 2009, you are considering purchasing a machine that costs $11,500 but that will generate cash payments of $3,000 per year for 5 years starting January 1, 2010. The cost of capital is 12%. Required: A. Use the net present value technique to determine if you should buy the machine? B. What would be the answer to the question above if the cash flows were as follows? January 1, 2010 $8,000 January 1, 2011 $1,000 January 1, 2012 $2,000 January 1, 2013 $3,000 January 1, 2014 $1,000

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