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Business: Future and Present Values for Decision Making A company consid - ers buying a machine that will increase its annual net income by an

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Business: Future and Present Values for Decision Making A company consid-
ers buying a machine that will increase its annual net income by an esti-
mated $70,000 per year for the next 6 years. Over the next 6 years, company
economists believe the money they invest from that continuous stream will
earn 5%. The future and present values of this stream over the next 6 years
are $489,802.33 and $362,854.49, respectively. If the cost of the machine is
$375,000, should the company buy the machine or invest the present value of
the machine?
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