Problem
Your company is deciding whether to invest in a new machine. The new machine will increase cash ?ow by $326,363 per year. You believe the technology used in the machine has a 10-year life; in otherwords, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1.?o0,000. The cost of the machine will decline by $110,000 per year until it reaches 351320.000, where it will remain. The required return is 16%.
What is the NPV if the company decides to wait 2 years to purchases the machine?