Question: Scenario: Amazon.com is planning to purchase a new bar-coding machine for one of its warehouses. You have been asked to prepare a simple analysis to

Scenario: Amazon.com is planning to purchase a new bar-coding machine for one of its warehouses. You have been asked to prepare a simple analysis to determine whether Amazon should purchase the machine. The bar-coding machine costs $60,000. It has a 5-year economic life and an estimated residual value of $10,000. The estimated annual net cash flow from the machine is $16,000. Amazon.coms required rate of return is 16%.
When you have completed your spreadsheet, answer the following questions:
1 What is the machines NPV?
2 What is the machines payback period?
3 Should Amazon.com purchase the machine? Why or why not?

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