A manufacturer of aerospace products has acquired a new CNC metal lathe for $29,000. The useful life of the lathe is ten years, at which time it is projected to have a market value of $8,000. Itis anticipated that the acquisition of this equipment will generate an additional $12,000 in annual revenues, while operating costs for the lathe will average $7,000 annually. The machine will be depreciated using the MACRS method, with a recovery period of 7 years. The company uses an after-tax MARR rate of 10% and has an effective tax rate of 25%. The duration of the project is seven years.

Has this asset been correctly classified? Justify your answer (Be specific).