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4. A small business is considering the purchase of one of the following computers Initial Cost Salvage Value Useful Life Annual Maintenance Computer A $3,900

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4. A small business is considering the purchase of one of the following computers Initial Cost Salvage Value Useful Life Annual Maintenance Computer A $3,900 $1,800 10 years $390 Computer B $5,500 $3,100 10 years $276 (years 1 to 5) $425 (years 6 to 10) 6% Interest Rate 6% a) Which computer should the business purchase? b) What first-cost is necessary for Computer A to Breakeven? c) What salvage value for Computer B will result in Computers A & B being equivalent? d) What is the book value of Computer B in year 4 using straight-line depreciation

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