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An eiectronics company expects a demand of 20,000 uniss per year for a special-purpose component during the next six years. Net retum per unt is

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An eiectronics company expects a demand of 20,000 uniss per year for a special-purpose component during the next six years. Net retum per unt is $5. To produco the conponent. the company must buy a machine costing $340,000 with al life of six years and a salvage value of $45,000 after six years. The company entimates that fepair cests wis be $2B,000 per year during Years 2 to 8 . If the rnquired rate of retum on imvestment is 11%, should it markat the compenent? The company markst the component

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