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Problem 7-07

An investment will generate $9,000 a year for 25 years. If you can earn 9 percent on your funds and the investment costs $100,000, calculate the present value of investment. Use Appendix D to answer the question. Round your answer to the nearest dollar. $

Should you buy it? Yes or No?

Calculate the present value of investment, if you could earn only 6 percent. Use Appendix D to answer the question. Round your answer to the nearest dollar. $

Should you buy it in this case? Yes or No?