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A Pizza Shop Owner Needs to Buy a Pizza Oven

Question 105

Multiple Choice

A pizza shop owner needs to buy a pizza oven and is deciding between a new one and a used one.If he buys an older used one it will generate $4,000 of net income for 3 years.If he buys a new one it will generate $5,000 of net income for 4 years.If the interest rate is 10%,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) $793.83
B) $2,577.10
C) $6,252.25
D) $2,777.78
E) $1,000

Correct Answer:

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