#4

4. A company is planning to invest $28000 on a lathe machine at year 0. The maintenance cost every year is $3000. The net cash flows generated from year 1 to year 6 is: $3000, and $7000 equally in the following 5 years. The machine has a 6-year service life and can be resold at the price at $6000 then. The MARR is 6%. (a) Draw the cash flow diagram. b) Determine the annual owning cost for the machine. c) Determine the equivalent present and annual revenue of the machine. d) Determine if this is a good investment using AE analysis