You have proposed that your company invest in an automated inspection tool to improve product quality and reduce the time to inspect your most successful product. The machine will cost $25,000 and will have a useful life of 10 years. Annual operating and maintenance costs are $500 per year. You've estimated that the anticipated quality improvements will produce an annual savings of $1800 from reduced returns and new revenues of $2200 each year. At the end of its useful life you anticipate a $3500 salvage value. Assume i=10% and find the CR(i), AEC(i), and AE(i). Which of the following best represents the decision your company should make regarding investing in this new tool?

Yes invest as CR(10%)=$4348, AEC(10%)=$348, AE(10%)= $3848 per year

Do not invest as CR(10%)=$4348, AEC(10%)=$3848, AE(10%)= $3848 per year

Do not invest as CR(10%) = $3,848, AEC(10%) = $4,348 and AE(10%) = -$348 per year

Yes invest as CR(10%)=$3,848, AEC(10%)=$4348, AE(10%)= -$348 per year