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Problem 7-07

An investment will generate $10,000 a year for 20 years. If you can earn 9 percent on your funds and the investment costs $120,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar. $

Should you buy it? -Select-Yes or no

Calculate the present value of investment, if you could earn only 5 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar. $

Should you buy it in this case? -Select-Yes or no