1.Overload Limited owns a machine that is 4 years old and has an estimated remaining physical life of no more than 2 years. The net cash flow and residual value estimates for the machine are in the table below.

End of Year Net cash flow Residual value

4 20,000 9,000

5 11,000 4,500

6 6,000 0

Suppose Overload Ltd has a required rate of return of 15% per annum, when should Overload Ltd retire the machine?