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A Pizza Shop Owner Who Needs to Buy a New

Question 107

Multiple Choice

A pizza shop owner who needs to buy a new pizza oven is trying to decide between two different used ones.Whichever oven he buys,it will generate $6,000 net revenue per year.But the older pizza oven has a useful life of only 3 years and the newer oven has a useful life of 5 years.If the interest rate is 7% per year,what is the difference in value between the two ovens? (Assume that each year's revenue is received at the end of the year. )


A) 413.25
B) $10,892.99
C) $15,745.90
D) $24,601.18
E) $8,855.29

Correct Answer:

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