The Sloppy Jeans Company is considering the purchase of a machine that would increase the company's cash inflows by $12 000 per year for six years. Operation of the machine would increase the company's cash payments by $400 in each of the first three years, $800 the fourth year, and $1000 in the fifth and sixth years. The machine costs $50 000 and would have a residual value of $2000 at the end of the sixth year.

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The Answer of The Sloppy Jeans Company is considering the purchase of a machine that would increase the company's cash inflows by $12 000 per year for six years. Operation of the machine would increase the company's cash payments by $400 in each of the first three years, $800 the fourth year, and $1000 in the fifth and sixth years. The machine costs $50 000 and would have a residual value of $2000 at the end of the sixth year.

The Sloppy Jeans Company Is Considering the Purchase of a Machine