7.23 A machine that lasts four years has the following net cash outflows. $12,000 is the cost of purchasing the machine, and $6,000 is the annual year-end operating cost. At the end of four years, the machine is sold for $2,000; thus, the cash flow at year 4, C4, is only $4,000.

The cost of capital is 6 percent. What is the present value of the costs of operating a series of such machines in perpetuity?

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Co C C C3 C4 $12,000 $6,000 $6,000 $6,000 $4,000