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What is the maximum the company should spend

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Problem - A company wants to replace one of its old machines with the following cash flows: Monthly Operating Cost: $3,501 Projected Increase: 6.79% The company is preapproved for a 40 month loan at 20.28% nominal rate, compounded monthly. They will also receive $590 if they trade in the old machine. If the new machine's monthly operating cost is $894, what is the maximum the company should spend for a new machine to make it an acceptable alternative?

Reference no: EM132998575

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