Monroe Corporation is considering the purchase of new equipment. The equipment will cost $52,000 today....
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Monroe Corporation is considering the purchase of new equipment. The equipment will cost $52,000 today. However, due to its greater operating capacity, Monroe expects the new equipment to earn additional revenues of $9,250 by the end of each year for the next 10 years 1-a. Assuming a discount rate of 1% compounded annually, calculate the present value of the additional revenue (an annuity) (EV of $1. PV of $1. EVA of $1. and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.) Present Value of annully 1-b. Should Monroe make the purchase? (Hint: If the present value of the additional revenue is greater than the cost, the company would make the purchase.) ONO Yes
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