Jerome operates a car repair shop and is considering whether to purchase a computer diagnostic tool for Korean automobiles. The tool, which costs $4,000, will enable Jerome to service Korean automobiles. This added business will give Jerome additional income of $2,000 in each of the next three years. Jerome ____ purchase the tool because the net present value of the tool is ____.
A) should; greater than zero
B) should; greater than $2,000
C) should not; less than zero
D) should not; less than $2,000
Correct Answer:
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