Answer to Question #288330 in Economics of Enterprise for Uy4

Question

A company has decided to purchase a new machine for $95.000. The new machine will be kept for 10 years. before being sold for 5000. what is the maximum amount of taxis can be paid keep this machine acceptable if the rate of return is 5 percent.

Answer 1

$FV=\frac{95000-5000}{(1+0.05)^{11}}=52621.14$