You can invest in a Machine that costs $800,000.You can expect revenues net of any expense, except maintenance costs, of $100,000 at the end of each year for years.
You will subcontract the maintenance costs at a rate of $15,000 per year to paid at the beginning of each year.
You can expect to act $250,000 for selling the machine at the end of the sixth year.
All these revenues and costs are after tax as is the 8% cost of capital. Should you buy the machine?