Question: Nick Heller owns a garage and is contemplating purchasing a
Nick Heller owns a garage and is contemplating purchasing a tire retreading machine for $18,000. After estimating costs and revenues, Nick projects a net cash flow from the retreading machine of $3,200 annually for 8 years. Nick hopes to earn a return of 9% on such investments. What is the present value of the retreading operation? Should Nick purchase the retreading machine?
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