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A piece of machinery may be acquired by making an immediate payment of $250,000 and payments of $35,000 and $30,000 one and three years from
A piece of machinery may be acquired by making an immediate payment of $250,000 and payments of $35,000 and $30,000 one and three years from now respectively. Alternatively, the machine may be purchased by making monthly payments of $5,000 in advance (beginning of month) for five years. Find the NPV of the two alternatives. Which alternative is preferable if money is worth 8.5% compounded quarterly
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