Question
A company is considering expanding their production capabilities with a new machine that costs $79,000 and...
A company is considering expanding their production capabilities
with a new machine that costs $79,000 and has a projected lifespan
of 8 years. They estimate the increased production will provide a
constant $10,000 per year of additional income. Money can earn 1.2%
per year, compounded continuously. Should the company buy the
machine over the life of the machine
Select an answer: Yes, the present value of the machine is greater
than the cost by $_____________
No: the present value of the machine is less than the cost by $_____________
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