Determine the present value of annuity

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Reference no: EM13825306

Monroe Corporation is considering the purchase of new equipment. The equipment will cost $37,900 today. However, due to its greater operating capacity, Monroe expects the new equipment to earn additional revenues of $6,000 by the end of each year for the next fifteen years

a. Assuming a discount rate of 5% compounded annually, determine the present value of annuity? Use Table 4. (Do not round PV factors. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Present value of annuity

b. Based on part (a), whether Monroe should make the purchase: yes/no

Reference no: EM13825306

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