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Acme Co. has excess cash that it wants to invest. Acme is considering purchasing an asset that is expected to return $25,000 per year after
Acme Co. has excess cash that it wants to invest. Acme is considering purchasing an asset that is expected to return $25,000 per year after tax for the next 5 years, with an after-tax disposal value of $10,000. Acmes required rate of return on this investment is 8%.
What is the maximum amount that Ames would be willing to pay to purchase this asset? (Use the appropriate discount factor from Appendix A and round your final answer to the nearest dollar.)
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