Upgrade some of your firm equipment

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Reference no: EM132024434

You are deciding whether or not to upgrade some of your firm's equipment. The current gear produces $520.42 in profit per year per unit, and the new gear is expected to produce $932.45 in profit per year per unit. The upgrade would cost $2,135 per unit. If the discount rate is 9.8% and the equipment is expected to operate indefinitely, what is the net present value of upgrading one unit of equipment? Round to the nearest penny. Please show work.

Reference no: EM132024434

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