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A company is studying the acquisition of machinery to package production at a cost of $800,000. To achieve the maximum level of machine efficiency, a

A company is studying the acquisition of machinery to package production at a cost of $800,000. To achieve the maximum level of machine efficiency, a certain degree of maintenance is necessary. The cost for this is established on a base of $3,000 during the first year. For the second year, the maintenance cost increases to $5,000. Due to changes in technology, the company expects to sell the machinery at the end of the second year for $500,000. With this machine you can have a monthly savings of $25,000, for salaries and benefits of the employees that the machine will replace. For the second year, the savings will be an additional 20%. The company typically uses an opportunity cost of 25% for investments of this type.

According to the previous case, answer the following questions

Is it advisable to purchase this machinery? Show all your calculations.

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