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An airline is deciding whether to purchase an additional airplane. It figures that the airplane will generate additional annual revenues of $150,000 for 10 years.
An airline is deciding whether to purchase an additional airplane. It figures that the airplane will generate additional annual revenues of $150,000 for 10 years. The current cost of the airplane is $2 million. The airplane could be financed with a loan at an interest rate of 5 percent per year. Should the airplane be purchased?
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