A company is planning to invest in a machine, the use of which
will result in the following:
-Annual revenues of $10,000 in the first year and increases of
$5,000 each year, up through year 9. From end of year 10, the
revenues will remain constant at $52,000 for an indefinite
period.
-The machine is to be overhauled every 10 years. The expense for
each overhaul is $40,000.
If the company expects a present worth of at least $100,000 at a
MARR of 10% for this project, what is the maximum investment that
the company should be prepared to make to purchase the piece of
equipment?