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Suppose a handbill publisher can buy a new duplicating machine for $2,000 and the duplicator has a 1-year life. The machine is expected to contribute
Suppose a handbill publisher can buy a new duplicating machine for $2,000 and the duplicator has a 1-year life. The machine is expected to contribute $2,200 to the year's net revenue.
a. What is the expected rate of return ________________%
b. If the real interest rate at which funds can be barrowed to purchase the machine is 8%, will the publisher choose to invest in the machine? yes or no
Will it invest in the machine if the real interest is 9%. Yes or no
If it is 11% yes or no
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