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1) A new packaging machine is expected to cost $175000 but is expected to increase productivity. Increase in annual revenues because of this equipment is estimated to be $50000 in the 1st year $85000 in the 2nd year and $50000 in subsequent years. The simple non-discounted payback period is (i=10% ):a. Less than 1 yearb. Between 1 and 2 yearsc. Between 2 and 3 yearsd. Longer than 3 years2) A company wants to have $200000 in a contingency fund 10 years from now. They will make five equal deposits at the end of years 1 through 5. The amount of the deposit is closest to (interest rate = 10%):a. $52760b. $22375c. $20341d. $243253) What is the Present Cost of a 5 year service contract where you will pay $5000 initially and this will decrease at a rate of $500/year starting in year one (i.e. your year 1 payment will be $4500) and will end in year 5 (i.e. 6 total payments). (i=10% annually compounded)?a.-$17204b.-$19954c.-$18628d.-$195234) You are evaluating the purchase of either Machine A with a life of 9 years or Machine B with a life of 6 years. You will need the use of the same type of machine you select for 12 years. What ANALYSIS time frame should you use?a. 9 yearsb. 12 yearsc. 18 yearsd. Not enough information to determine

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