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 S 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 Paybuck parind: Tum at whach berefits a ait of investment (A) 2.8 (nt: $15,000- .00 - SM,0 (В) 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
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 S 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 Paybuck parind: Tum at whach berefits a ait of investment (A) 2.8 (nt: $15,000- .00 - SM,0 (В) 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
S 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
Paybuck paiad:
Tum at whach berefits a ait of investment
(A) 2.8
(nt: $15,00 - 1.00 SM 0
Juiga por yur : $5,00 (s1.40 : $0 30) = 45,00 yr
(В) 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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