Oaks Company is a small company that employs 15 people in a town with a population of about 9,000. Oaks plant manager is considering the acquisition of a new machine that will cost $474,500. The machine will replace five long-time employees and is expected to generate savings of $105,600 in after-tax cash flows for the next 10 years. Oaks' cost of capital is 18 percent. Based on the net present value of the machine, should Oaks buy the machine? Are there qualitative factors that he should consider in his decision? Why?

Answer rating: 100% (QA)

NPV analysis is a financial indicator of evaluating investment that considers the ... View the full answer