You are looking at investing in a pizza vending machine. The machine is going to last 4 years and you estimate that it will produce cash flows of $15,000 per year of operation.

The machines currently cost $42,000. You expect that the price of the machine will drop by 35% next year and then 5% in the following year.

Your cost of capital is 10%

Does it make sense to invest? When is optimal?

I need help with both of these please. Please explain the full answer and how you got the answer(with work if possible please). I am a bit confused on this.

Thank you