New candle-making equipment

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Reference no: EM131925222

Caroline's Candles would like to buy $134,000 of new candle-making equipment. However, the company has a major loan maturing in three years and needs this money at that time to avoid bankruptcy. The candle-making equipment is expected to increase the cash flows by $27,000 in the first year, $48,000 in the second year, and $69,000 a year for the following two years. Should Caroline's Candles buy the equipment at this time? Why or why not?

Reference no: EM131925222

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