Company is deciding whether or not to invest in a new machine. New machine will
ID: 2696683 • Letter: C
Question
Company is deciding whether or not to invest in a new machine. New machine will increase cash flow by $340,000 per year. Technology used in the machine has a 10-year life; no matter when the machine is purchased; it will be obsolete in 10 years from today. Machine is currently priced at $1,800,000. Cost will decline by $130,000 per year until it reaches $1,150,000; where it will remain. If required return is 12%, should they purchase the machine and if so, when should they purchase it? Looking for answer in EXCEL Format
Explanation / Answer
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http://highered.mcgraw-hill.com/sites/dl/free/0072439749/36504/ros69749_ch14.pdf
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