Question
This is for intro to finance so we aren't using advanced formulas. This questions has been answered twice with very different and incoherent results. Please
This is for intro to finance so we aren't using advanced formulas. This questions has been answered twice with very different and incoherent results. Please help and if possible be as detailed as you can be.
Stuffed Turkey Inc. is considering investing into a new feeding machine. The price tag of this equipment is $15,000. Of this amount $5,000 must be paid now, but the machine would not be delivered until one year from today, at which point the remaining $10,000 are due. After receiving the machine, it will take another full year to get it operational. However, once it is ready, the feeder will make the turkeys happier and result in extra quarterly profits of $400 for 10 years. If the applicable discount rate is 10%, compounded semi-annually, should the company go ahead with this investment ?
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