Show how to compute the minimum cash flow

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Reference no: EM132735190

Most businesses replace their computers every two to three years. Assume that a computer costs $2,000 and that it fully depreciates in three years, at which point it has no resale value whatsoever and is thrown away.

Problem a. If the interest rate for financing the equipment is equal to i, show how to compute the minimum cash flow that a computer must generate to be worth the purchase. Your answer will depend on i.

Reference no: EM132735190

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