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Acme Company is considering purchasing a new machine. The initial investment is $25,000 and the net benefits (savings realized minus operating costs) are as follows:
Acme Company is considering purchasing a new machine. The initial investment is $25,000 and the net benefits (savings realized minus operating costs) are as follows:
End of Year : Net Cash Flow
0 : -$25,000
1 : -$1,500
2 : $1,500
3 : $4,500
4 : $7,500
5 : $10,500
6 : $13,500
You have been asked by the president of the company to evaluate the economic merit of the acquisition. The companys MARR is 12%. What is the present worth of this project?
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