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What is wrong with the board logic

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Question - Community Health Center (CHC) is considering spending fifty thousand dollars on a blood analyzer. The annual cash profits from the machine will be seven thousand dollars for each of the seven years of its useful life. The board of directors wants to pursue this investment because they think the forty-nine thousand dollars CHC will receive is close to the fifty thousand dollars cost. What is wrong with the board's logic? What is the IRR on the investment? Can you explain these questions to me?

Reference no: EM132132857

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