Larson Manufacturing is considering purchasing a new injection-molding machine to expand its production capacity. There is a one-time cost of $30,000 to perform site preparation for the machine, which will occur immediately. With the new injection-molding machine installed, Larson Manufacturing expects to increase its annual revenue by $50,000. The machine will be used for five years and can be salvaged for $20,000 at the end of 5 years. If the company’s MARR is 16%, what would be the maximum amount that should be spent on purchasing the new injection-molding machine?
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