12. A manufacturing firm is attempting to determine whether to purchase a new machine for its factory. The initial cost of the machine is $1,000,000. The firm has the cash to pay for the machine; so incurring debt is not an issue. The firm estimates that the machine will generate cash flows, net of operating costs, of $150,000 in its first year, $300,000 in its second through fourth years, and $200,000 in its fifth year. The machine is expected to last for five years and will have no value at the end of its useful live (i.e. no salvage value). The firm uses a 5.9% annual rate to discount its cash flows. Assume the cost of the machine is incurred at the beginning of the first period (1/1/2019) and the cash inflows generated by the machine are received at the end of the first (12/31/2019) through fifth (12/31/2023) years of the machine's useful life. a. Should the firm purchase the machine? b. Does the firm's decision change if the discount rate is 8.1%? 12 Inten How do interest rate changes affect decisions of investors (and borrowers) in question 10 and of investors in capital assets in question 11