Answer:
$23, 472
Explanation:
The question is to calculate how much Derek is willing to pay for the machine.
What the money Machine will pay in 5 years = $43, 245.00
The Discount rate= 13%
The number of years = 5 Years
Therefore, Present value of the machines:
PV= P x [1/(1+r)∧n]; P= Future benefit; r = rate and n = number of years
The calculation is as follows