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(Net present value analysis). Architect Services Inc, would like to purchase a blueprint machine for $50,000. The machine is expected to have a life of
(Net present value analysis). Architect Services Inc, would like to purchase a blueprint machine for $50,000. The machine is expected to have a life of 4 years, and a salvage value of 10,000. Annual maintenance costs will total $14,000. Annual savings are predicted to be $30,000. The companies required rate of return is 11%.
Please answer:
- Ignoring the time value of money. Calculate the net cash inflow or outflow resulting from this investment opportunity?
- Should the company purchase the blueprint machine? Explain why or why not?
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