question 1: A company is considering buying a machine that would give a net cost savings of
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Question:
question 1:
A company is considering buying a machine that would give a net cost savings of $70,000 per year for 10 years. The cost of the machine is $325,000. The company weighted average cost of capital is 12%. What is the net present value of buying machine?
question 2:
for the above, what is the profitability index for the machine?
question 3:
for the above, what is the difference between the IRR and the ARR? assume there is no depreciation and the cost is given as the average cost.
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
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