Boxer Production, Inc., is in the process of considering a flexible manufacturing system that will help the
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Boxer Production, Inc., is in the process of considering a flexible manufacturing system that will help the company react more swiftly to customer needs. The controller, Mick Morrell, estimated that the system will have a 10-year life and a required return of 10% with a net present value of negative $500,000. Nevertheless, he acknowledges that he did not quantify the potential sales increases that might result from this improvement on the issue of on-time delivery, because it was too difficult to quantify. If there is a general agreement that qualitative factors may offer an additional net cash flow of $150,000 per year, how should Boxer proceed with this investment?
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Principles Of Accounting Volume 2 Managerial Accounting
ISBN: 9780357364802
1st Edition
Authors: OpenStax
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