Determine the probability that buying the equipment

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A general contractor is interested in buying new construction equipment for grading with a purchase price of $159,000. The equipment will last for 5 years with a salvage price of $22,000. The provided income/benefit information is based on previous record for a contractor with similar situation: Income/benefit information: If the bank offers Certificate of Deposit with an interest rate of 6%, determine the probability that buying the equipment will produce a return less than that of the bank and the probability that buying the equipment will produce a return more than that of the bank.

Reference no: EM13153564

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