Newman Auto Repair is considering the purchase of a hydraulic machine costing approximately $35,000. Using a discount rate of 18%, the present value of future cash inflows are calculated to be $42,000. To yield at least an 18% return, the actual cost of the machine should not exceed the $35,000 estimate by more than:
A) $28,000.
B) $49,000.
C) $7,000.
D) $6,300.
C
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