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Question 3) (20 points) A new machine can be purchased today for $300,000. The annual revenue for the machine is calculated to be S67,000, and
Question 3) (20 points) A new machine can be purchased today for $300,000. The annual revenue for the machine is calculated to be S67,000, and the equipment will last 10 years. Expect the maintenance and operating costs to be $3000 a year and to increase S600 per year. The salvage value of the machine will be S20,000. What is the rate of return for this machine? Hint: try for F15% and i: 18% for the interpolation
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