Question: Larson Manufacturing is considering purchasing a new injection-molding machine for $200,000 to expand its production capacity. It will cost an additional $20,000 to do the

Larson Manufacturing is considering purchasing a new injection-molding machine for $200,000 to expand its production capacity. It will cost an additional $20,000 to do the site preparation. With the new injection-molding machine installed, Larson Manufacturing expects to increase its revenue by $82,000 per year. The machine will be used for seven years, with an expected salvage value of $76,000 . At an interest rate of 15 %, would the purchase of the injection-molding machine be justified?

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