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Ace Company is considering an investment in new machine to save labor cost. The machine costs $400,000 and has a useful life of four years.

Ace Company is considering an investment in new machine to save labor cost. The machine costs $400,000 and has a useful life of four years. Each year, the machine will save $150,000 in labor costs. Aces hurdle rate is 10%. Should Ace invest in the new machine? Why or why not?

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