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Question - Your company invests in adjacent land to expand your production facility so your company can make improvements to the air scrubbing units like the ones below to mitigate the H2S inhalation risk to your employees.
Year
Preparation Loan
1
$6,674
2
$8,050
3
$9,426
4
$10,802
5
$12,178
6
$13,554
The land is unimproved, however, and your since your company spent capital upfront to purchase the land, there is no money to build currently. You have to take small loans out for the land preparation each year. The following table indicates your spending pattern for land improvement:
Based on this loan pattern, at 4% interest, would you expect yield the equivalent uniform annual land improvement amount to be?
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