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Question 7 4 pts Newton Rock Co is considering the purchase of a new rock crusher. This new machine will allow Newton to receive new
Question 7 4 pts Newton Rock Co is considering the purchase of a new rock crusher. This new machine will allow Newton to receive new cash flows of $40,000 per year for the next four years. At the end of the fourth year, Newton will sell the crusher for $55,000. The purchase price of the new rock crusher is $150,000. At what cost of capital (required return) is Newton indifferent between purchasing the crusher and not purchasing the crusher? At what cost of capital should Newton purchase the crusher? O Indifferent at 13.75%; purchase if cost of capital 12.69% O Indifferent at 24.68%; purchase if cost of capital > 24.68%
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