I'd see it as value versus volume: if the new kit lets you do clever stuff faster and/or better, so as to drive down the variable costs of your existing business/designs, that's good.
If there's an implication that you have to do anything new or ramp-up volume to amortize it, I wouldn't go there.
I'd also go over the depreciation rates, etc. and carefully consider the opportunity costs -- what else you might do with that much money, which would drop favourably to the bottom line. For example, would better premises, either location or facilities or both, mean you could do the same work only faster (room to move)? How does rent compare to a commercial mortgage?
Interest rates will go up from here (they have to), so how affordable would the kit be at, say, 8% compounded? If it wouldn't be affordable, don't do it. Also consider: 1. you may get a much better deal later when sales are harder for the machinery distributors, or secondhand, 2. in this climate, don't buy anything that uses breakable 'hens-teeth' parts: if the manufacturer dies, you might be left with a white elephant that you're still paying for.
In one way it's a nice problem to have, in another it's tough. One thing I was taught in business school though was that a carefully made decision NOT to do something is still valuable. Chances are that competitors who haven't analysed will jump in and catch a cold in consequence. On the other hand, if the numbers do stack up in a higher-interest-rate world, be bold.
Bet that didn't help much! ;-)
E.
