A company engaging in selling of laboratory equipment estimates that profit from sales should increase by *2,00, 000 per year if a mobile demonstration unit is built. A large unit with sleeping accommodation for the driver will cost 9, 70,000 while a smaller unit without sleeping cabin will be Rs. 6,30,000. Salvage values for the large and small units after 5 years will be, 197,000 and Rs.35000 respectively. Lodging costs saved by the larger unit should amount 1, 10,000 annually, but its transportation costs will exceed those of the smaller unit by 31, 000. With the money at 9% should a mobile demonstration unit be built? And if so which size is preferable? Use net annual worth to determine which is better and show all the steps and working

A company engaging in selling of laboratory equipment estimates that profit from sales should increase by *2,00, 000 per year if a mobile demonstration unit is built. A large unit with sleeping accommodation for the driver will cost 9, 70,000 while a smaller unit without sleeping cabin will be Rs. 6,30,000. Salvage values for the large and small units after 5 years will be, 197,000 and Rs.35000 respectively. Lodging costs saved by the larger unit should amount 1, 10,000 annually, but its transportation costs will exceed those of the smaller unit by 31, 000. With the money at 9% should a mobile demonstration unit be built? And if so which size is preferable? Use net annual worth to determine which is better and show all the steps and working

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company engaging in selling of laboratory equipment estimates that profit from sales should increase by *2,00, 000 per year if a mobile demonstration unit is built. A large unit with sleeping accommodation for the driver will cost 9, 70,000 while a smaller unit without sleeping cabin will be Rs. 6,30,000. Salvage values for the large and small units after 5 years will be, 197,000 and Rs.35000 respectively. Lodging costs saved by the larger unit should amount 1, 10,000 annually, but its transportation costs will exceed those of the smaller unit by 31, 000. With the money at 9% should a mobile demonstration unit be built? And if so which size is preferable? Use net annual worth to determine which is better and show all the steps and working

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