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4. Suppose a diagnostic machine will yield a net of $1000 per quarter for 5 years after which the machine can be sold for $1000.

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4. Suppose a diagnostic machine will yield a net of $1000 per quarter for 5 years after which the machine can be sold for $1000. How much should a firm pay for the machine if it wants to earn 7.5% annually on its investment and also set up a sinking fund to replace the purchase price? For the fund, assume quarterly payments and a rate of 5.5% compounded quarterly, a) $22.739 b) $20.739 C) $22.689 d) $21.739 e) $21,689

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