Thomas Taylor owns a garage and is contemplating purchasing a tire retreading machine for $16,820. After estimating costs and revenues, Thomas projects a net cash inflow from the retreading machine of $3,400 annually for 7 years. Thomas hopes to earn a return of 7% on such investments.

What is the present value of the retreading operation? Present value $____________

Should Thomas purchase the retreading machine? Thomas should/should not purchase the tire retreading machine.