To complete a project you can either buy a machine at the beginning of a 5...

 

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To complete a project you can either buy a machine at the beginning of a 5 year period, or hire 5 employees at the beginning of a 5 year period. Employee costs (salary and benefits) are $5,000 per employee at the end of each month for 5 years. You can sell the machine at the end of the 5 years for a total of $200,000 plus 20% of the original machine price. What is the maximum price that it makes sense to pay for the machine if effective monthly interest is j = 0.3% To complete a project you can either buy a machine at the beginning of a 5 year period, or hire 5 employees at the beginning of a 5 year period. Employee costs (salary and benefits) are $5,000 per employee at the end of each month for 5 years. You can sell the machine at the end of the 5 years for a total of $200,000 plus 20% of the original machine price. What is the maximum price that it makes sense to pay for the machine if effective monthly interest is j = 0.3%

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The maximum price for the machine that it makes sense to pay is approximately 1 820 000 This is calc... View the full answer