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Question 72 (2 points) A new piece of equipment is expected to generate the following stream of cash revenues: End of Year 1: $5,000 End
Question 72 (2 points) A new piece of equipment is expected to generate the following stream of cash revenues: End of Year 1: $5,000 End of Year 2: $5,000 End of Year 3-20: $20,000 per year What is the maximum amount the company would be willing to pay today to buy the equipment if their annual interest rate on borrowed funds is 12%? (A range of answers is provided to accommodate answers from either a calculator or the tables.) $124,020 - $124,040 $153,440 - $153,450 O $157,820 - $157,840 $159,380 - $159,390 Question 71 (2 points) Davos Corporation expects a project to generate cash inflows as follows: End of Year 1: End of Year 2: End of Year 3: $1,000 $2,000 $3,000 Assuming that money compounds annually at 8%, what is the maximum amount Davos would be willing to invest into this project today? $5,022 O $5,556 O $6,000 $12,223
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