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A machine costs $250 today and it provides benefits worth $125 a year. The expected life of the machine is 4 years. The price of

A machine costs $250 today and it provides benefits worth $125 a year. The expected life of the machine is 4 years. The price of the machine is expected to decrease by 7% per year. The discount rate is 13%.

Which year should you purchase the machine?

1

2

3

4

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