Berry Chips Inc. (BCI) is considering acquiring a new semiconductor fabricator. The machine costs $985,000, will last for eight years, and has a salvage value of $45,000. The forecasted net revenue stream is as shown. For simplicity, assume all net revenues are received at the end of the year. BCI uses a discount rate of 9%.

Required:
(a) Use the net present value method to determine whether BCI should buy the machine.
(b) Name two things that would have to change for you to change your decision. Assume cash flows cannot change.

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Salvage Value Net Cash Inflows Year 1 Cost $985,000 Inflows 9 75,000 90,000 220,000 280,000 210,000 175,000 160,000 110,000 45,000