(Solution) - Berry Chips Inc BCI is considering acquiring a new semiconductor -(2025 Original AI-Free Solution)

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Berry Chips Inc. (BCI) is considering acquiring a new semiconductor fabricator. The machine costs $985,000, will last for eight years, and has a salvage value of $45,000. The forecasted net revenue stream is as shown. For simplicity, assume all net revenues are received at the end of the year. BCI uses a discount rate of 9%.

Required:
(a) Use the net present value method to determine whether BCI should buy the machine.
(b) Name two things that would have to change for you to change your decision. Assume cash flows cannot change.