Question: A new machine will cost $25,000. The machine is expected to last 4 years and have no salvage value. If the interest rate is 12%,

A new machine will cost $25,000. The machine is expected to last 4 years and have no salvage value. If the interest rate is 12%, determine the return and the risk associated with the purchase. The following projections have been made.

Scenario	1	2	3
probability	0.3	0.4	0.3
annual savings	$7000	$8500	$9500

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