A new machine that will lead to savings in labour costs of $16,000 per year can be

Question:

A new machine that will lead to savings in labour costs of $16,000 per year can be purchased for $52,000. However, it will cost $1500 per year for the first four years and $2500 per year for the next four years to service and maintain it. In addition, its annual electrical power consumption will cost $1000. After a service life of eight years, the of the machine is expected to be $5000. Should the machine be acquired if the company requires a minimum return on investment of 15%? Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...