Barker Production Company is considering the purchase of a flexible manufacturing system. The annual cash benefits/savings associated
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Question:
Barker Production Company is considering the purchase of a flexible manufacturing system. The annual cash benefits/savings associated with the system are: Decreased waste $ 75,000 Increased quality 100,000 Decrease in operating costs 62,500 Increase in on-time deliveries 12,500 The system will cost $750,000 and will last ten years. The company's cost of capital is 10%.
Required:
A. What is the payback period for the flexible manufacturing system?
B. What is the NPV for the flexible manufacturing system?
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt , Eugene F. Brigham
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