The opportunity to invest in machine

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Reference no: EM131493543

You have the opportunity to invest in a machine that costs $340,000. The machine generates revenues of $100,000 at the end of each year and requires maintenance costs of $10,000 at the beginning of each year. The machine incurs a maintenance cost today because of start-up expenses. If the economic life of the machine is five years and the relevant discount rate is 10 percent, should you buy the machine? What if the relevant discount rate is 9 percent?

Reference no: EM131493543

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