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Calculate the present value of the investment

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Problem - Bonus calculation Questions - Calculate the Present value of the investment in a machine with a 5 year life-span. It will generate profit in the following way: $1000 at the end of year 1, $1500 at the end of year 2, $2600 and the end of the 3rd year, $3000 at the end of the 4th year and finally has a salvage value of $1,000 at the end of the 5th year. Assume a discount rate of 13%.

If the investor requires a 10% rate of return at what price would it be appropriate to purchase this asset?

Reference no: EM132896561

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