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New machinery needs to be purchased and is priced at $42,500. The improvements to the...

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Finance

New machinery needs to be purchased and is priced at $42,500. The improvements to the produc)on line are expected to generate $8,500 of income in perpetuity at the end of the third year a]er the purchase. If that money is transferred to a bank account that pays 4.5% interest per year, how much is this cash flow worth to the company today? Is it worth the investment?

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