01203361 Construction Engineering and ManagementFall 2016SolutionQuestion 3Consider a machine that costs $20,000 and has a five-usefulness life. At the end of the five years, it can be sold for $4,000. The annual operating and maintenance (O&M) costs are about $500. If the firm could earn $5,000 revenue per year with this machine, should it be purchased at an interest rate of 10%?