Poly-Chem Plastics is considering two types of injection molding machines: hydraulic and electric. The hydraulic press (HP) will have a first cost of $605,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric machine technology (EMT) will have a first cost of $800,000, annual costs of $122,000, and a salvage value of $130,000 after 5 years The ROR on the extra investment for the EMT alternative is
Poly-Chem Plastics is considering two types of injection molding machines: hydraulic and electric. The hydraulic press (HP) will have a first cost of $605,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric machine technology (EMT) will have a first cost of $800,000, annual costs of $122,000, and a salvage value of $130,000 after 5 years The ROR on the extra investment for the EMT alternative is
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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Poly-Chem Plastics is considering two types of injection molding machines: hydraulic and electric. The hydraulic press (HP) will have a first cost of $605,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric machine technology (EMT) will have a first cost of $800,000, annual costs of $122,000, and a salvage value of $130,000 after 5 years
The ROR on the extra investment for the EMT alternative is
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Poly-Chem Plastics is considering two types of injection molding machines: hydraulic and electric. The hydraulic press (HP)
will have a first cost of $605,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric
machine technology (EMT) will have a first cost of $800,000, annual costs of $122,000, and a salvage value of $130,000
after 5 years.
NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part.
Use an AW-based equation to determine the ROR on the extra investment reguired for the EMT alternative.
The ROR on the extra investment for the EMT alternative is
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