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Question 2 The capital investment for a new highway paving machine is $650,000. The estimated annual expense, in year zero dollars (in constant dollars), is
Question 2 The capital investment for a new highway paving machine is $650,000. The estimated annual expense, in year zero dollars (in constant dollars), is $90,000. This expense is estimated to increase at the rate of 8 % per year. Assume that f= 5%, N=7 years, market value at the end of year seven is $94,500 in year zero dollars, and the inflation-free interest rate is 10% per year. What uniform annual revenue, in actual dollars, would the machine need to generate to break even
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