(5 pts) A laser cutting machine is purchased today for $20,000. There are no mai

Question

(5 pts) A laser cutting machine is purchased today for $20,000. There are no maintenance costs for the next two years. Maintenance at the end of year 3 is expected to be $2,000, with each subsequent year's maintenance costs exceeding the previous year's by S1,000. After the first year revenue of $10,000, an increase in revenues of $2000 per year is expected. The planning horizon is 6 years. Which one of the following cash flow diagrams is NOT correct? 1. (D) All correct 10K 12x 14K 16 18K 20 10K 12K 12x 13K 14K 1 2K 2K 2K 20K 20K 20K

Explanation / Answer

All options are correct (Option D)

All the cash flow diagrams given above reflect the same net cash flows for the years 0 - 6.

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