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Question (3): The IPS company has installed a system to help reduce the number of defective products. The capital investment in the system is $X1, and the projected annual savings are tabl below. The system's market value at the EOY five is negligible, and the MARR is x2 per year EOY Savings 25,000 30,000 35,000 40,000 46,000 3. a What is the FW of this investment? Based on cconomical decision nuk, is this a good investment? b. What is the IRR of the system? Based on economical decision ruke, is this a good investment? c. What is the discounted payback period for this investment? X1=75000 X2=10%

Question (3): The IPS company has installed a system to help reduce the number of defective products. The capital investment in the system is $X1, and the projected annual savings are tabl below. The system's market value at the EOY five is negligible, and the MARR is x2 per year EOY Savings 25,000 30,000 35,000 40,000 46,000 3. a What is the FW of this investment? Based on cconomical decision nuk, is this a good investment? b. What is the IRR of the system? Based on economical decision ruke, is this a good investment? c. What is the discounted payback period for this investment? X1=75000 X2=10%

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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Question (3): The IPS company has installed a system to help reduce the number of defective products. The capital investment in the system is $X1, and the projected annual savings are tabled below. The system's market value at the EOY five is negligible, and the MARR is x2% per year. Savings 25,000 30,000 35,000 40,000 46,000 EOY 2 3 4. a. What is the FW of this investment? Based on cconomical decision rule, is this a good investment? b. What is the IRR of the system? Based on economical decision rule, is this a good investment? c. What is the discounted payback period for this investment? X1=75000 X2=10%
Transcribed Image Text:Question (3): The IPS company has installed a system to help reduce the number of defective products. The capital investment in the system is $X1, and the projected annual savings are tabled below. The system's market value at the EOY five is negligible, and the MARR is x2% per year. Savings 25,000 30,000 35,000 40,000 46,000 EOY 2 3 4. a. What is the FW of this investment? Based on cconomical decision rule, is this a good investment? b. What is the IRR of the system? Based on economical decision rule, is this a good investment? c. What is the discounted payback period for this investment? X1=75000 X2=10%
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