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As CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment.

As CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. The vendor is offering repayment options of $10,000 at the end of each year for five years, or no payment for two years followed by one payment of $45,000. The current market rate of interest is 13%. Calculate present value of both options.

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