You are the manager of a manufacturing firm, and you are considering purchasing a new machine for
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You are the manager of a manufacturing firm, and you are considering purchasing a new machine for your assembly-line process. The machine costs $105,000. The economists that work for the company estimate that the additional income from the machine will be a constant $7800 for the first year, then will increase by $700 each year after that. In order to buy the machine, the company needs to be convinced that it will pay for itself by the end of 8 years with this additional income. Money can earn 2.7% per year, compounded continuously. Should the company buy the machine? Please provide your analysis to the chief operating officer (COO) of the company.
Related Book For
Financial Accounting Information For Decisions
ISBN: 978-0324672701
6th Edition
Authors: Robert w Ingram, Thomas L Albright
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