Question: A machine costs $20000 and gives a cash flow of $25000 a year for three years. If the frim can sell the machine on year-1,2,3. The machine cost and salvage value are as follows:
Year 1 : Maintenance - 0 , Salvage - 13000
Year 2 : Maintenance - 8000, Salvage - 4000
Year 3 : Maintenance - 12000 , Salvage - 0
Evaluate on which year the machine should be replaced