A company is considering expanding their production capabilities with a new machine that costs $60,000 and has a projected lifespan of 6 years. They estimate the increased production will provide a constant $11,000 per year of additional income. Money can earn 1.5% per year, compounded continuously. Should the company buy the machine?

Select an answer

• Yes, the present value of the machine is greater than the cost by

• No, the present value of the machine is less than the cost by

$__________________________over the life of the machine