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Suppose a Piece of Capital Equipment Will Produce an MRP

Question 43

Multiple Choice

Suppose a piece of capital equipment will produce an MRP of $100 000 per year for the next three years (beginning one year from now) . What is the maximum price a profit- maximizing firm will pay to purchase it if the annual interest rate is 12 percent?


A) $71 178
B) $213 534
C) $240 183
D) $243 460
E) $267 857

Correct Answer:

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