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Rosenholm Corporation uses a discount rate of 1 8 % in its capital budgeting. Partial analysis of an investment in automated equipment with a useful

Rosenholm Corporation uses a discount rate of 18% in its capital budgeting. Partial
analysis of an investment in automated equipment with a useful life of 5 years has thus
far yielded a net present value of ($327,960). This analysis did not include any estimates
of the intangible benefits of automating this process nor did it include any estimate of
the salvage value of the equipment.

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