From the course: Accounting Foundations: Managerial Accounting
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The billion-dollar machine
From the course: Accounting Foundations: Managerial Accounting
The billion-dollar machine
- I have here a special little machine. - What is it? - This creates money. - Money? How much money? - This little machine here creates exactly $1 per year, completely legal. The dollar bill pops out of this hole right here at midnight on December 31st each year. - Are you sure this is legal? - Absolutely. Now, the question is how much will you pay me to buy this dollar-bill machine? - How long is it going to last? - That's the good news. This little machine is guaranteed to last 1 billion years. Yep, that's right. In its useful lifetime, this machine will produce a total of $1 billion. - That's a billion-dollar machine, wow. - So how much will you pay me for this billion-dollar machine? Will you pay me a billion dollars? - No. - Why not? You'll completely recover your billion-dollar investment over the life of this machine. You pay me a billion dollars now for it. And over time, you'll get your billion…
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