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Badger Corp Is Trying to Decide Whether to Buy a New

Question 87

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Badger Corp is trying to decide whether to buy a new machine with a price of $40,000.Their analysis indicates the machine will generate annual cash flows of $11,000 for each of the next 6 years.The rate of return expected of any investment Badger make is 9%.Should Badger purchase the machine?

Correct Answer:

verifed

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Present value of an annuity
ANN = $11,00...

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