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Suppose a firm is considering buying a machine today at $25,000. The use of this machine in the production process of a commodity causes firm`s
Suppose a firm is considering buying a machine today at $25,000. The use of this machine in the production process of a commodity causes firm`s net incomes to rise by $ 15,000 in each of the next two years. Assume the rate of interest is 10% and machine has no scrap value. Is it desirable for the firm to purchase the machine?. Explain your answer.
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