Tim brown of omega drycleaners is planning to invest in a, Ask an Expert

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Tim Brown of Omega Drycleaners is planning to invest in a new dry cleaning machine worth $80,000. The life of the machine is estimated to be 12 years and at the end of this period the manufacturer will pay $10,000 for the old machine. The incremental cash flow from this investment is $10,000 per year. If the discount rate is 6% should Tim Brown invest in the machine? Would the decision change if the discount rate increase to 8%?

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Financial Management, Finance

Category:- Financial Management
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