A company is considering expanding their production capabilities with a new machine that costs $67,000 and has a projected lifespan of 9 years. They estimate the increased production will provide a constant $8,000 per year of additional income. Money can earn 1.4% per year, compounded continuously. Should the company buy the machine? Yes, the present value of the machine is greater than the cost by V the life of the machine O $ over

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter6: Exponential And Logarithmic Functions
Section: Chapter Questions
Problem 8RE: Suppose an investment account is opened with aninitial deposit of 10,500 earning 6.25...
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A company is considering expanding their production capabilities with a new machine that costs $67,000
and has a projected lifespan of 9 years. They estimate the increased production will provide a constant
$8,000 per year of additional income. Money can earn 1.4% per year, compounded continuously. Should the
company buy the machine?
Yes, the present value of the machine is greater than the cost by ✓
the life of the machine
OF $
over
Transcribed Image Text:A company is considering expanding their production capabilities with a new machine that costs $67,000 and has a projected lifespan of 9 years. They estimate the increased production will provide a constant $8,000 per year of additional income. Money can earn 1.4% per year, compounded continuously. Should the company buy the machine? Yes, the present value of the machine is greater than the cost by ✓ the life of the machine OF $ over
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