information developed in class through a power point presentation for 20 minutes. Each member of the group will have to speak and present part of the groups analysis in front of the class.

Instructions:

Write a memo to the Chief Financial Officer and the President of the company detailing your explanation of your recommendations. Please note the President has no finance background.

You recommendation should have the following but not limited to: (Ignore income tax effects.)

Calculate the annual rate of return for the new machine. (Round to two decimals.)

Compute the cash payback period for the new machine. (Round to two decimals.)

Compute the net present value of the new machine. (Round to the nearest dollar.)

On the basis of the foregoing data, would you recommend that LG buy the machine? Why or

why not?

If the required rate of return is 13% and 20%, what will your recommendation be?

Make sure you reference your work properly.

The memo should not exceed 2,000 words.

Hint:

To include in your memo, theory; what is the rate of return? And etc.

Analysis would include quantitative and qualitative analysis.