ajpheif16

Well, I don't have my books with me, but I think it's pretty straightforward.

The PV of a perpetuity is Annuity/Rate. To take the cost of the machine into consideration, you have to subtract it from the PV of the cash flow stream.

As for using the BA II, if you're familiar with calculating the NPV of an ordinary annuity with the cash flow mode, I'd assume you could get pretty close by doing the following:

CF0 = -15 million
CF1 = 1.8 million
F1 = ~9999999999
[NPV]
I = 10.5
[Calculate]