A company is evaluating the feasibility of investing in machinery to manufacture an automotive component. It would
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Question:
A company is evaluating the feasibility of investing in machinery to manufacture an automotive component. It would need to make an investment of $ today, after which, it would have to spend $ every year starting one year from now, for twelve years. At the end of the period, the machine would have a salvage value of $ The company confirmed that it can produce and sell components every year for twelve years and the net return would be $ per component. The company's required rate of return is
a What is the Net Present Value NPV of this investment option? b Is the investment option feasible?
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