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A company buys a machine for 2 million on January 1, 2015. Its life expectancy is 6 years. The company intends to replace the machine
A company buys a machine for 2 million on January 1, 2015. Its life expectancy is 6 years.
The company intends to replace the machine in 6 years with exactly the same.
The expected price increase in the machine is 8% per year. To this end, the company creates a special fund with annual equal installments at the end of each year for 6 years. Capital and fund costs are 10% per year. Calculate the annual payment at the checkout.
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