Tiger Computers, Inc., of Singapore is considering the purchase of an automated etching machine for use in the production of its circuit boards. The machine would cost $900,000 an additional $650,000would be required for installation costs and for software. Management believes that the automated machine would provide substantial annual reductions in costs, as shown below:

	Annual Reduction in Costs
Labor costs	$	240,000
Material costs	$	96,000

The new machine would require considerable maintenance work to keep it properly adjusted. The company