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The management of Douglass Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present
The management of Douglass Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year Income from operations Net cash flow 1 $18,750 $93,750 2 $18,750 $93,750 3 $18,750 $93,750 4 $18,750 $93,750 5 $18,750 $93,750
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