Question: You buy a machine for $ 1 6 5 , 0 0 0 that will produce 5 0 , 0 0 0 widgets per year.

You buy a machine for $165,000 that will produce 50,000 widgets per year. You sell each widget for $1.35 and they cost you a total of $0.85 each to manufacture. a) If you plan on keeping the machine for four years, what must the market value be at the end of the four years to justify the investment in the new machine? You must make an 8% return on your investment. b) What is another name for this market value at the end of four years?

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