Question: A company is considering installing a new machine that initially costs $800000, with a further outlay of $100000 at the end of each of years

A company is considering installing a new machine that initially costs $800000, with a further outlay of $100000 at the end of each of years three and six for maintenance. The salvage value is $75000 at the end of 10 years. Expected returns are $125000 for each of the first three years and $175000 for each of the remaining seven years. Should the company install the new machine if money is worth 9% compounded annually?

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