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Question: A new machine will cost $25,000. The machine is expected to last 4 years and have no salvage value. If the interest rate is 12%, determine the return and the risk associated with the purchase. The following projections have been made.

Scenario 1 2 3
probability 0.3 0.4 0.3
annual savings $7000 $8500 $9500

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  • Reference No.:- M92851461

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