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$50,000 (+) $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 2 3 4 6. 7 10 Years (-) $500,000 8.

$50,000 (+) $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 2 3 4 6. 7 10 Years (-) $500,000 8.

Essentials Of Investments
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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To automatically insert electronic components in printed circuit boards for a cell phone production line, a $500,000 surface mount placement (SMP) machine is being evaluated by a manufacturing engineer. Over the 10-year planning horizon, it is estimated that the SMP machine will produce annual after-tax cost savings of $92,500. The engineer estimates the machine will be worth $50,000 at the end of the 10-year period. Based on the firm’s 10% after-tax MARR, should the investment be made?

$50,000 (+) $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 2 3 4 6. 7 10 Years (-) $500,000 8.
Transcribed Image Text:$50,000 (+) $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 $92,500 2 3 4 6. 7 10 Years (-) $500,000 8.
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