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2. Dexter Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1 Year 2 $120,000 $200,000 Dexter requires a minimum
2. Dexter Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1 Year 2 $120,000 $200,000 Dexter requires a minimum rate of return of 10%, what is the maximum price Dexter should pay for this equipment? (Round to the nearest dollar.) a. $274,381 b. $165,290 c. $320,000 d. $160,000 3, Suzy Douglas has been offered the opportunity of investing $73,540 now. The investment will earn 8% per year and at the end of its life will return $200,000 to Suzy. How many years must Suzy wait to receive the $200,000? a. 10 c. 12 d. 13
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