A company is deciding whether to invest in a machine. The new machine will increase cash flow by $268,000 per year and will have a 10 years of useful life. The machine is currently priced at the amount of $1,350,000. The cost of the machine will decrease by $75,000 per year, however, this is only until it reaches $900,000 where it will remain and be this value. Your required return is 13%, should you purchase the machine? And if you do purchase the machine when, do you purchase it?

How would you determine what year to purchase it.