Question: Big Power LLC is considering purchasing a machine with an expected useful life of 8 years for $80 000. It will generate $12 000 per

Big Power LLC is considering purchasing a machine with an expected useful life of 8 years for $80 000. It will generate $12 000 per year in EBITDA. The machine will be depreciated linearly to its anticipated salvage value of $20 000. The firm has a 20% marginal tax rate, the required return is 12%. Should this machine be purchased?

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