Question:question 1:
A company is considering buying a machine that would give a
net cost savings...
Question
question 1:
A company is considering buying a machine that would give a
net cost savings...
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.