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Consuela owns a catamaran that she purchased five years ago for $100,000. When cruise ships visit her city she does snorkeling trips for the tourists.

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Consuela owns a catamaran that she purchased five years ago for $100,000. When cruise ships visit her city she does snorkeling trips for the tourists. It is being depreciated straight-line over its 10-year expected life and is currently worth $35,000. It is expected to have no value at the end of its life in five years. She is considering moving to a larger boat that can accommodate more people. She has found a deal on a nice used boat for $125,000. The new boat would be depreciated straight-line over its five year life. Consuela expects that revenues would increase by $50,000 per year, but she will have to hire more crew to work with the drunken tourists and use more fuel, so expenses will increase by an expected $12.500. She expects that the new boat would actually be worth $20,000 in five years. Consuela's marginal tax rate is 30% and her required rate of return is 15%. Should she replace her boat

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