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Machine A which is a basic model costs $ 2 5 , 0 0 0 and lasts 5 years. At the end of the 5
Machine A which is a basic model costs $ and lasts years. At the end of the years it has a salvage value of $ and its market value at the end of years is $ An enhanced model, Machine B sells for $ and has a life of years with a salvage value of $ The benefit that these two machines are anticipated to provide is $ per year, indefinitely. Looking at an year window with a rate of APR compounded yearly, what is the difference between the net present worth of Machine B over Machine AHint: the second copy of Machine A can be sold at the end of the th year for the price that it will command after a year life.
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