Acme Semiconductor is expanding its facility and needs to add equipment. There are three process tools under consideration. You have been asked to perform and economic analysis to select the most appropriate tool to acquire. You have gathered the following information for evaluation. Each of these tools has a useful life of seven years. Acme's accounting staff has established a company- wide MARR of 8% per year. Which of the process tools should be selected? Investment Costs Annual Expenses Annual Revenues Market Value IRR Tool A P55,000,000 P6,250,000 P18,250,000 P18,000,000 15.9% Tool B P45,000,000 P8,550,000 P16,750,000 P3,750,000 7.9% Tool C P80,000,000 P3,200,000 P20,200,000 P22,000,000 14.6%
Acme Semiconductor is expanding its facility and needs to add equipment. There are three process tools under consideration. You have been asked to perform and economic analysis to select the most appropriate tool to acquire. You have gathered the following information for evaluation. Each of these tools has a useful life of seven years. Acme's accounting staff has established a company- wide MARR of 8% per year. Which of the process tools should be selected? Investment Costs Annual Expenses Annual Revenues Market Value IRR Tool A P55,000,000 P6,250,000 P18,250,000 P18,000,000 15.9% Tool B P45,000,000 P8,550,000 P16,750,000 P3,750,000 7.9% Tool C P80,000,000 P3,200,000 P20,200,000 P22,000,000 14.6%
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
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Transcribed Image Text:Acme Semiconductor is expanding its facility and needs to add equipment. There are three process
tools under consideration. You have been asked to perform and economic analysis to select the
most appropriate tool to acquire. You have gathered the following information for evaluation. Each
of these tools has a useful life of seven years. Acme's accounting staff has established a company-
wide MARR of 8% per year. Which of the process tools should be selected?
Tool A
P55,000,000
P6,250,000
P18,250,000
P18,000,000
15.9%
Tool B
Tool C
Investment Costs
Annual Expenses
P45,000,000
P8,550,000
P16,750,000
P3,750,000
7.9%
P80,000,000
P3,200,000
P20,200,000
P22,000,000
14.6%
Annual Revenues
Market Value
IRR
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