Question
A manufacturing company is considering investing in a new cutting machine that will cost $113,000 and has an annual maintenance cost of $14,000. Assume that
"A manufacturing company is considering investing in a new cutting machine that will cost $113,000 and has an annual maintenance cost of $14,000. Assume that the company is required to spend $45,000 at the end of every 7 years to overhaul the machine, and the annual maintenance costs do not change. If the machine lasts indefinitely under these conditions, what is the net present worth (NPW) of the machine at an interest rate of 16%? Even though all of the dollar values are costs, express your answer as a positive number (i.e., net present cost)."
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