Question: The Cook County Authority is considering the purchase of a
The Cook County Authority is considering the purchase of a small plane to transport government officials. It is hoped that the plane will save money on travel costs for government employees. Assume the county requires a 10 percent rate of return. If the plane’s cost is $250,000 and it can be sold in five years for $75,000, what minimum annual savings in transportation costs is needed in order to make the plane a good investment?
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