# An engineering company is considering purchasing a new plastic extrusion machine. The machine will be kept for 5 yeAn AAn engineering company is considering purchasing a new plastic extrusion machine

An engineering company is considering purchasing a new plastic extrusion machine. The machine will be kept for 5 yeAn AAn engineering company is considering purchasing a new plastic extrusion machine. The machine will be kept for 5 years and costs \$850,000 and is expected to bring in benefits to the company of
\$250,000 per year for 5 years. The machine has a total annual operating cost of \$50,000 the first year and it is expected to increase by \$5000 a year for the remaining life of the machine. The machine is required to undergo a major cleaning and tune up at the end of the 3rd year; the cost of this tune up is \$35,000. At the end of year 5 the company can sell the machine for \$125,000. the company uses an interest rate of 6% per year, should the company invest in this machine? If the operating costs increased to \$55,000 would your decision change? (show all work to support your answer)n engineering company is considering purchasing a new plastic extrusion machine. The machine will be kept for 5 years and costs \$850,000 and is expected to bring in benefits to the company of
\$250,000 per year for 5 years. The machine has a total annual operating cost of \$50,000 the first year and it is expected to increase by \$5000 a year for the remaining life of the machine. The machine is required to undergo a major cleaning and tune up at the end of the 3rd year; the cost of this tune up is \$35,000. At the end of year 5 the company can sell the machine for \$125,000. the company uses an interest rate of 6% per year, should the company invest in this machine? If the operating costs increased to \$55,000 would your decision change? (show all work to support your answer)engineering company is considering purchasing a new plastic extrusion machine. The machine will be kept for 5 years and costs \$850,000 and is expected to bring in benefits to the company of
\$250,000 per year for 5 years. The machine has a total annual operating cost of \$50,000 the first year and it is expected to increase by \$5000 a year for the remaining life of the machine. The machine is required to undergo a major cleaning and tune up at the end of the 3rd year; the cost of this tune up is \$35,000. At the end of year 5 the company can sell the machine for \$125,000. the company uses an interest rate of 6% per year, should the company invest in this machine? If the operating costs increased to \$55,000 would your decision change? (show all work to support your answer)ars and costs \$850,000 and is expected to bring in benefits to the company of
\$250,000 per year for 5 years. The machine has a total annual operating cost of \$50,000 the first year and it is expected to increase by \$5000 a year for the remaining life of the machine. The machine is required to undergo a major cleaning and tune up at the end of the 3rd year; the cost of this tune up is \$35,000. At the end of year 5 the company can sell the machine for \$125,000. the company uses an interest rate of 6% per year, should the company invest in this machine? If the operating costs increased to \$55,000 would your decision change? (show all work to support your answer)