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You are considering buying a new machine for your factory. You estimate that your profits will increase by $25,000 over its first year in operation (for simplicity assume profits are received at the end of each year), $20,000 over its second year, $10,000 over its third year, at which time you will be able to sell it for $5,000. If interest rates are 10%, what is the maximum amount you should pay for this machine?

a. $46,769.35

b. $60,000.00

c. $50,525.92

d. $51,769.35

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M964915

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