Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $317,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,700,000. The cost of the machine will decline by $108,000 per year until it reaches $1,160,000, where it will remain.

If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year.

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6