E12.13 As of January 1, 2012, AC company wants to acquire a new machine costing $196,000. The machine has an estimated useful life of seven years and no salvage value. AC's tax rate is 30% and the depreciation is calculated uniformly. The expected pretax and cash flows are as follows: Pretax Cash Revenues Pretax Cash Expenses 2011 $64,000 $22,000 2012 72,000 72,00 24,000 2013 80,000 30,000 2014 66,000 20,000 2015 60,000 28,000 18,000 69,000 2016 2017 50,000 16,000 AC's hurdle rate is 11%, Should they invest in the new machine? Why? Hint: Net the cash revenues with the cash expenses