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Which of the following machines has the lowest user cost? Machine A costs $10,000 in real dollars and depreciates at a 20% rate, machine B
Which of the following machines has the lowest user cost? Machine A costs $10,000 in real dollars and depreciates at a 20% rate, machine B costs $25,000 in real dollars and depreciates at a 10% rate, machine C costs $15,000 in real dollars and depreciates at a 15% rate, and machine D costs $20,000 in real dollars and depreciates at a 5% rate. The nominal interest rate is 4% and the expected inflation rate is 2%. (A) Machine A (B) Machine B (C) Machine C (D) Machine D
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