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The company plans to buy some new office fixtures for $2,000 cash in March. To the distribution company this will be considered a capital purchase.

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The company plans to buy some new office fixtures for $2,000 cash in March. To the distribution company this will be considered a capital purchase. Money can be borrowed and repaid in multiples of $500, at an interest rate of 12 percent per annum. Management wants to minimize borrowing and repay rapidly. Interest is computed and paid when the principal is repaid. Assume that borrowing takes place at the beginning, and

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