Problem #$4$: Capital Budgets

Rambus Inc. would like to purchase a production machine for $$325,000.$ The machine is expected to have a life of three years, and a salvage value of $$50,000.$ Annual maintenance costs will total $$12,500.$ Annual savings are predicted to be $$112,500.$ The company's required rate of return is $12\%.$

Factors: Present Value of $$1$

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