The Triple-A Manufacturing Co. is considering the purchase of a machine.The machine will cost a total of $100,000 and has an expected useful life of 6 years.The company's cost of capital is 10% and the inflation rate in Canada is expected to be 5% annually for the foreseeable future.

The following projections are made:

The machine will produce 10,000 units annually.

In the first year, each unit will sell for $6.00.

Subsequent increases in the selling price are expected to be 4 percent per year.

Labour costs will be $12,000 in the first year of operations are expected to rise by 8 percent each year.

Materials will cost $14,000 in the first year and will rise by 5 percent annually.

Other expenses total $2,000 in the first year and will rise by 3 percent a year.

Corporate taxes are 40 percent.

The CCA rate is 20 percent.

Should the company purchase the new machine?