SOLUTION: 8. Jacob Mfg Co. is considering an investment in a new machine costing $ 25,000. The machine is expected to provide the following returns over the next 5 years. Year 1: $ 5000

Question 92179: 8. Jacob Mfg Co. is considering an investment in a new machine costing $ 25,000. The machine is expected to provide the following returns over the next 5 years.
Year 1: $ 5000
Year 2: $ 6000
Year 3: $ 7500
Year 4: $ 7500
Year 5: $ 9500.
These returns are received at the end of each year. If the firm requires 20% return on investment, should it purchase the machine?
Answer is : NO.

Please answer by Wednesday 15th August, 2007.
Answer by faseka(2) (Show Source): You can put this solution on YOUR website!
yes u are right cause if u add all of the payments of the five years togather you well get 35.500 and u take off 20% then it would equal greater then 25.000
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