Problem:
You have the opportunity to invest in a machine that costs $340,000.
The machine generates revenues of $100,000 at the end of each year, and requires maintenance costs of $10,000 at the beginning of each year. The machine incurs a maintenance cost today.
If the economic life of the machine is 5 years, and the discount rate is 10%, should you by the machine?
What if the discount rate is 9%?