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In an effort to reduce costs, Dearborn Corporation is considering an investment in equipment that will reduce product defects. This equipment will cost $420,000, have
In an effort to reduce costs, Dearborn Corporation is considering an investment in equipment that will reduce product defects. This equipment will cost $420,000, have an estimated useful life of 10 years, and have an estimated salvage value of $50,000 at the end of 10 years. The company's discount rate is 12%. What amount of cost savings will this equipment have to generate per year in each of the 10 years for the equipment to be an acceptable investment? (Note: There may be rounding error depending on the discount factor you use. Choose the answer closest to the one you calculate.) e $50,690 or more e $41,315 or more e $105,315 or more e$71.487 or more e $35,690 or more
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