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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 $200.
However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $2,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 12.0% per year, what should your friend do?
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