suppose the appropriate discount rate is 8% per year and the macine is purchased today. maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. assume also that the machine will be depreciated via the straight line method over seven years and that they ahve a 10 year life with a negligible salvage value. the marginal corporate tax rate is 35%. should beryl's iced tea continue to rent, purchase its current machine, or purchase the advanced machine?
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