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Monroe Corporation is considering the purchase of new equipment. The equipment will cost $47,000 today....

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Accounting

Monroe Corporation is considering the purchase of new equipment. The equipment will cost $47,000 today. However, due to its greater operating capacity, Monroe expects the new equipment to earn additional revenues of $8,000 by the end of each year for the next 10 years.

Required: 1-a. Assuming a discount rate of 1.5% compounded annually, calculate the present value of annuity. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 1-b. Should Monroe make the purchase?

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