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2. A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? A. $980 В. $391 С. S1,186 D. $ 68 E. $550

2. A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? A. $980 В. $391 С. S1,186 D. $ 68 E. $550

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? 2. A. $980 В. $391 С. S1,186 D. $ 68 E. $550
Transcribed Image Text:A company determines that the maximum they should pay for a new machine is $46,679. The company estimates the machine will produce a net cash flow of $8,000 per year and will last for 7 years. The interest rate that is acceptable to the company is 5%. At the end of 7 years the company estimates it will be able to sell the machine for what amount? 2. A. $980 В. $391 С. S1,186 D. $ 68 E. $550
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