Question
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $600. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $7275 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 8% per year, what should your friend do? What is your advice if the machine takes one year to build? The NPV of the machine is $ 225. What is your advice if the machine takes one year to build? The net present value in this case will be $
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