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A company is considering buying a new bottle-capping machine. The initial cost of the machine is...

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Finance

A company is considering buying a new bottle-capping machine.The initial cost of the machine is $325,000 and it has a 10-yearlife. Monthly maintenance costs are expected to be $1200 per monthfor the first 7 years and $2000 per month for the remaining years.The machine requires a major overhaul costing $55,000 at the end ofthe 5th year of service. Assume that all these costs occur at theend of the appropriate period. What is the future value of all thecosts of owning and operating this machine if the nominal annualinterest rate is 7.2%?

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