Sid Patel owns a service station and has the opportunity to purchase a car-wash machine for $15,000.

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Sid Patel owns a service station and has the opportunity to purchase a car-wash machine for $15,000. After carefully studying projected costs and revenues, Patel estimates that the car-wash machine will produce a net cash flow of $2,600 annually and will last for eight years. He determines that an interest rate of 14 percent is adequate for his business. Calculate the present value of the machine to Patel.

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Principles of Accounting

ISBN: 978-1133626985

12th edition

Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson

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