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Should the company invest in the machine

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Reference no: EM132775745

The Green Goddess Salad Oil Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $45,000.

The annual cash flows have the following projections.

year Cash flow
1 15,000
2 20,000
3 25,000
4 10,000
5 5000

  • The Green Goddess Salad Oil Company is considering the purchase of a new machine that would increase the speed of manufacturing tires and save money. The net cost of the new machine is $45,000. The annual cash flows have the following projections.

Problem 1: If the discount rate is 10%, should this company invest in the machine? Show your calculations

Reference no: EM132775745

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