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Covington Corporation purchased a vibratory finishing machine for $15,000 in year 0. The useful life of the machine is 10 years, at the end of
Covington Corporation purchased a vibratory finishing machine for $15,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of zero. The machine generates net annual revenues of $6,500.
The annual operating and maintenance expenses are estimated to be $800. If Covington's MARR is 10%, how many years will it take before this machine becomes profitable? Assume that the cash flows occur continuously throughout the year.
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