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You ( many years ago ) are deciding whether to upgrade your company's equipment from typewriters to computer technology at a cost of $ 2
You many years ago are deciding whether to upgrade your
company's equipment from typewriters to computer
technology at a cost of $ per machine, and machines
will be replaced onetoone. The typewriter technology was
able to output $ per unit per year, and you expect the
computers to be able to output $ per unit per year
forever but render the typewriters completely worthless.
What would the NPV be of making this upgrade, per
upgraded unit? Assume a interest rate.
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