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A company can purchase a piece of equipment for $1300 today or they can pay for it over a fiver year period with the following schedule: Year 1-$100, Year 2-$200, Year 3-$300, Year 4-$400, Year 5-$500. If the cost of money is 6% per year what is the difference between the present worth of the direct purchase and the payment over time (e.g. PW direct purchase-PW time payment=?) Please show all work and not just final answer, i will not rate if no work is shown

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91232107

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