You are thinking of building a new machine that will save you $ 3000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1% per year forever. What is the present value of the savings if the interest rate is 4 % per year? The present value of the savings is (Round to the nearest dollar.)
The present value of the savings is
=CF/(r-g)
=3000/(4%-(-1%))
=60000
the above is answer..
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