Required: 1) Compute the payback on the project. 2) Compute the net present value of the project.
Required: 1) Compute the payback on the project. 2) Compute the net present value of the project.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
![Example 17: Big B Company is cyaluating a proposal
to accjuire an automated welding machine for its small
parts assembly department. The cquipment costs
ž6,80,000 plus the companý would havc to pay a 5%
salcs tax on the purchase and spend 720,000 for freight
und installation. The equipment has a useful life of 10
years and is cxpected to produce cost savings of
1,57,500 per year. There is no salvage value.
Company's policy is not to fund any capital project
whose internal rate of return is below the company's
16% cost of capital.
Required:
1) Compute thc payback on the project.
2) Compute the net present valuc of the project.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1ee59e9d-b134-4f8b-a82e-98a415fc5991%2F22141e66-647c-48b6-b732-019d2217df8f%2F7dt911r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Example 17: Big B Company is cyaluating a proposal
to accjuire an automated welding machine for its small
parts assembly department. The cquipment costs
ž6,80,000 plus the companý would havc to pay a 5%
salcs tax on the purchase and spend 720,000 for freight
und installation. The equipment has a useful life of 10
years and is cxpected to produce cost savings of
1,57,500 per year. There is no salvage value.
Company's policy is not to fund any capital project
whose internal rate of return is below the company's
16% cost of capital.
Required:
1) Compute thc payback on the project.
2) Compute the net present valuc of the project.
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