Organization desires to purchase machine costing

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Reference no: EM131562515

The manager in your organization desires to purchase a machine costing $300,000 with a life of 5 years. The machine will yield cost reduction to the production process to the extent of $50,000 in year 1, $60,000 in year 2. $75.000 in year 3, and $90,000 in years 4 and 5 each. Following the NPV criterion of decision making, what will be your recommendation to the manager if the market rate of interest is 8 percent?

Reference no: EM131562515

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