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A company's factory has a useful life of 30 years. It originally cost $40 million to build and is expected to depreciate uniformly over the
A company's factory has a useful life of 30 years. It originally cost $40 million to build and is expected to depreciate uniformly over the 30 years, leaving a salvage value of $10 million. Calculate the opportunity cost of using the factory in its fifth year. Assume the rate of return on a similarly risky investment is 14 percent.
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