Rephrase the following paragraphs. Peregrine, a manufacturer of custom retail displays, was purchased by Brian French in

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Rephrase the following paragraphs.

Peregrine, a manufacturer of custom retail displays, was purchased by Brian French in 2012.Peregrine currently has two CNC (computer-numerical-control) machines.If one of the CNC machines were to break down, this would slow production.One of the CNC machines was a problem for Peregrine as it was not reliable and during a break down that should have only lasted 24 hours, it was identified that the machine had a much more complicated problem and could prevent Peregrine from completing promised jobs.This happening repeatedly could result in a loss of business overtime.

Peregrine needs to purchase a third CNC machine to assist when one machine goes down, however this could also increase the company's capabilities by having an additional machine.Peregrine has two choices.The company can purchase a CNC machine outright with cash or finance the addition CNC machine.Peregrine was not financially prepared to purchase the CNC machine outright, however with some adjustments, the purchase could be possible.The total cash price of an additional CNC machine is $142,000.Peregrine can pay this upfront with a salvage value of $40,000 after five years or pay $50,000 upfront and finance the remaining balance with a salvage value at $40,000 after year five.

Considering the fact that money today will not be the same value as money in five years, making the decision to purchase versus lease or finance can be a difficult decision.Due to cost of living increase, increase in wages, etc., a CNC machine of $142,000 purchased today will not be worth $142,000 in five years.Including the cost of depreciating, the remaining salvage would be $40,000 after five years.The additional machine will increase cost of goods sold and insure that all contract needs are met if a machine were to go down for an extended time period.There will be an increase of $10,000 per month or $120,000 per year for operating cost.

If Peregrine were to pay cash for the CNC machine, their net present value will be $229,800 after five years.If Peregrine were to pay $50,000 upfront and finance the remaining over five years, their net worth would be $310,756.Considering the money of $142,000 carries a different value in five years, this can be a hard decision to make.The economy can change, for example, due to a pandemic.The best solution is to pay cash when possible and avoid financing in case you were to have to liquidate due to an economic crisis.