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Government supervisors in a remote area of Queensland are considering the purchase of a small, used plane to save on travel costs. The plane will
Government supervisors in a remote area of Queensland are considering the purchase of a small, used plane to save on travel costs. The plane will cost $400 000 and can be sold in five years for 20 per cent of the original cost.
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If 10 per cent is the required rate of return, what minimum annual savings in transportation costs are needed for this plane to be a good investment? Ignore income taxes.
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