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Should this company invest in the machine

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Reference no: EM132784205

Question - 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.

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

Reference no: EM132784205

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