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Problem 10 One more break even problem Acme Corp is looking at buying a new road...

Problem 10

One more break even problem

Acme Corp is looking at buying a new road paving machine.

The machine costs $3,000,000 and Acme wants to look at break even cost over a 4 year period of time . The machine paves roads for $275.00 per mile less than the current system . How many miles does this equate to per year to break even if an 8% cost of money is applied?

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Answer #1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 3 Fistly we have to calculate the annual saving 5 Present value = annual saving * present value annuity (8%,4) 6 30000

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