Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $310,000 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 $1,650,000. The cost of the machine will decline by $102,000 per year until it reaches $1,140,000, where it will remain. If your required return is 13 percent, calculate the NPV today. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV:

If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	NPV
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6

Should you purchase the machine?

• Yes

• No

If so, when should you purchase it?

multiple choice 2

• Today

• One year from now

• Two years from now