Should artistic purchase the machine

Reference no: EM131394443

Artistic Adobes is considering growing its business by adding a paint machine that costs $90,000. The machine will generate an additional $29,800 in before-tax operating income (excluding depreciation) for the next five years. At the end of five years, the machine can be sold for $8,000. The machine falls into the MACRS 3-year class. Artistic's marginal tax rate is 34 percent, and its required rate of return is 15 percent. Should Artistic purchase the machine?

Reference no: EM131394443

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