RoadRollers Paving Company is considering buying a new asphalt laying machine. The machine costs $2,300,000 and is in a 30% CCA class. Investment in NWC is 200,000 at the start. One time up front training costs are 10,000 The machine is expected to have no salvage value at the end of a projected 10 year life. Revenues are expected to be $600,000 per year, and cost are estimated at $220,000 per year. The Cost of Capital for the firm is 12% and the firm is in the 34% tax bracket.

Should the investment be undertaken?

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