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1.You are considering the purchase of a labor-saving device. The device costs PHP 420,000.00 and will last for 12 years. The annual savings are PHP

1.You are considering the purchase of a labor-saving device. The device costs PHP 420,000.00 and will last for 12 years. The annual savings are PHP 70,000.00.

The cost of capital is 14%. What is the present value of the labor-saving device at the end of each year? What is the net present value of this investment? Would you purchase this machine?

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