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. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5% per year?

. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5% per year?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. A company can manufacture a product using hand tools. Tools will cost $ 1,000, and the manufacturing cost per unit will be $ 1.50. As an alternative, an automated system will cost $ 15,000 and the manufacturing cost per unit will be $ 0.50. with an anticipated annual volume of 5,000 units and neglecting interest, the payback period (yr) for the automated system is most nearly (A) 2.8 |5000 t (O5 X5000) (B) 3.6 (C) 15.0 (D) never 3. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5% per year? (A)2.4 (B) 2.6 (C) 3.3 (D)4.5
Transcribed Image Text:2. A company can manufacture a product using hand tools. Tools will cost $ 1,000, and the manufacturing cost per unit will be $ 1.50. As an alternative, an automated system will cost $ 15,000 and the manufacturing cost per unit will be $ 0.50. with an anticipated annual volume of 5,000 units and neglecting interest, the payback period (yr) for the automated system is most nearly (A) 2.8 |5000 t (O5 X5000) (B) 3.6 (C) 15.0 (D) never 3. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5% per year? (A)2.4 (B) 2.6 (C) 3.3 (D)4.5
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