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Should purchase the new piece of equipment

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Reference no: EM132805741

A business is considering purchasing a piece of new equipment for $100,000. The equipment will generate the following revenues:

Year 1: $50,000
Year 2: $30,000
Year 3: $20,000
Year 4: $10,000

Problem 1: The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. Based on your above calculations, should they purchase the new piece of equipment? Why?

Reference no: EM132805741

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