Question: Richard has estimated that the new machine needed by his business costs 10,000 and it will generate 2000 additional revenue every year for next 5

Richard has estimated that the new machine needed by his business costs £10,000 and it will generate £2000 additional revenue every year for next 5 years. He will have to dispose of the current machine for £1000 that was purchased for £6000 three years ago. The new machine cannot produce one of the products that currently is generating net cash flow of £1500 annually.

In the example, __________ is an irrelevant figure for considering all relevant cash flows.

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