Question: Bill Broadman owns a garage and is contemplating purchasing a
Bill Broadman owns a garage and is contemplating purchasing a tire retreading machine for $16,280. After estimating costs and revenues, Bill projects a net cash flow from the retreading machine of $2,800 annually for 8 years. Bill hopes to earn a return of 11% on such investments. What is the present value of the retreading operation? Should Bill Broadman purchase the retreading machine?
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