Would purchase of the injection-molding machine be justified

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Reference no: EM132151908

Question: Larson Manufacturing is considering purchasing a new injection-molding machine for $370,000 to expand its production capacity. It will cost an additional $25,000 to do the site preparation. With the new injection-molding machine installed, Larson Manufacturing expects to increase its revenue by S93,000 per year. The machine will be used for five years, with an expected salvage value of $67,000. At an interest rate of 8%, would the purchase of the injection-molding machine be justified?

Reference no: EM132151908

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