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Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $500. However, oncebuilt, the machine will last forever and will require no maintenance. The machine can be builtimmediately, but it will cost $5,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 14.5% peryear, what should your frienddo?
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