Your friend in mechanical engineering has invented a money machine. The main drawback of the...
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Finance
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture
$500.
However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost
$5,000
to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is
10.0%
per year, what should your friend do?
The NPV of the machine is
$_____
(Round to the nearest dollar.)
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