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Keira Knightley Company buys a piece of equipment for $36,442 that will last for 7 years. The equipment will generate cash flows of $7,000 per year and will have no salvage value at the end of its life. Ignore taxes unless told to include them.What is the net present value using a 12% cost of capital?A $2,681B $4,495C ($2,681)D ($4,495)
1. Why are marginal costs increasing? Why are they not always constant? You may give examples in some industries or just state two reasons at least.
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