Your company is deciding whether to Invest in a new machine. The new machine will Increase cash flow by $330,000 per year. You believe the technology used in the machine has a 10-year life; In other words, no matter when you purchase the machine, It will be obsolete 10 years from today. The machine is currently priced at $1,850,000. The cost of the machine will decline by $120,000 per year until it reaches $1,250,000, where it will remain.
If your required return is 12 percent, calculate the NPV If you purchase the machine today. (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV
$
If your required return is 12 percent, calculate the NPV If you wait to purchase the machine until the Indicated year. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPV
Year 1
$
Year 2
$
Year 3
$
Year 4
$
Year 5
$
Year 6
$
Should you purchase the machine?
Yes
No