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The Arrow Company is considering the purchase of equipment that will return cash flows as follows End of period Cash flows 1 $5000 2 3000

The Arrow Company is considering the purchase of equipment that will return cash flows as follows

End of period Cash flows

1 $5000

2 3000

3 2000

4 1000

5 500

Assume a cost of money of 10 percent. What is the maximum amount the company could pay for the machine and still be financially no worse off that if it did not buy the machine?

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