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Calculation with Inflation 1.(20 points) A machine currently under consideration by Marcus Industries has a cost of $31,000 . When the purchasing manager complained that
Calculation with Inflation 1.(20 points) A machine currently under consideration by Marcus Industries has a cost of $31,000 . When the purchasing manager complained that a similar machine the company purchased 5 years ago was much cheaper, the salesman responded that the cost of the machine has increased molely in accordance with the inflation rate, which has averaged 5% per yeer. When the purchasing manager checked the invoice for the machine he purchased 5 years ago, he saw that the price was $25,000 . Was the salesman telling the truth about the increase in the cost of the machine? What should the machine cost now, provided the price increased by only the inflation rate? No cash flow diagram required. Method: Formula
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