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A small company is considering installing a new machine to speed up a manufacturing process. The...

A small company is considering installing a new machine to speed up a manufacturing process. The machine is expected to cost $1,250,000. The owners expect another improved machine will be on the market in four years so that is the expected life of this machine, however they do anticipate that they can sell the four year old machine in the final year for $300,000. This new machine is expected to increase revenues by $400,000 per year. The interest rate for this project is 6%. Should the company consider this project? Why or why not?

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