Teagyn corp. produces PITAs and has a choice of upgrading or replacing a piece of equipment. The
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Teagyn corp. produces PITAs and has a choice of upgrading or replacing a piece of equipment. The upgrade would cost $M and have an operating cost per unit of $ Replacing the equipment would cost $M and would reduce operating costs per unit from the upgrade estimate by Replacing would also allow the current machine to be sold for $M now. Regardless of the choice, Teagyn forecasts sales of units at $ per unit and expects unit sales to grow at per year over the next four years five years in total, selling price and costs would remain the same Use a WACC of to compare these choices.
What is the Profitability Index if Teagyn replaces the machine? Please enter your response with no units or commas and decimal places: would be note: NO units and use rounding
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