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You are operating an old machine that is expected to produce a cash flow of $5,000...

You are operating an old machine that is expected to produce a cash flow of $5,000 in each of the next 3 years before it fails. You can replace it now with a new machine that costs $20,000 but is much more efficient and will provide a cash flow of $10,000 a year for 4 years. Should you replace your equipment now? This discount rate is 15%.

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