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A recently hired chief executive officer wants to reduce future production costs to improve the company's earnings, thereby increasing the value of the company's
A recently hired chief executive officer wants to reduce future production costs to improve the company's earnings, thereby increasing the value of the company's stock. The plan is to invest $88,000 now and $68,000 in each of the next 4 years to improve productivity. By how much must annual costs decrease in years 5 through 12 to recover the investment plus a return of 12% per year? The annual cost decreases by $
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