A government of Lalalend is planning to invest in a machine that is going to considerably reduce pollution. The machine is expected to have a useful life of five years, after which the machine can be sold as scrap for an estimated £5000. The government plans to issue bonds to pay for the machine and intends to treat the interest rate on the bonds as the relevant discount rate for evaluating the project. The machine will cost the £175,000, all of which must be paid at the beginning of the project. The new machine will reduce costs of production in the economy by £50,000 per year, for each year of the machineʹs life. The estimated supply and demand for loanable funds are given by these equations: MD = 25,000,000 - 125,000,000r MS = 2,500,000 + 62,500,000r 

Given the information above, should the firm undertake the investment in the machine?