Two types of continuous production are being considered for a shoe factory, which has the following cash flows: Production “X” Productión “Z” Inicial cost ($) 62,850 77,632 Annual Cost-Operation ($) 15,300 22,900 Rescue value ($) 8,125 17,953 Useful life (Years) 4 6 Using an interest rate of 25% per year. Do a present value analysis using the MCM and select the most suitable type of production. Evidence your process.
Two types of continuous production are being considered for a shoe factory, which has the following cash flows: Production “X” Productión “Z” Inicial cost ($) 62,850 77,632 Annual Cost-Operation ($) 15,300 22,900 Rescue value ($) 8,125 17,953 Useful life (Years) 4 6 Using an interest rate of 25% per year. Do a present value analysis using the MCM and select the most suitable type of production. Evidence your process.
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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Two types of continuous production are being considered for a shoe factory, which has the following cash flows:
|
Production “X” |
Productión “Z” |
Inicial cost ($) |
62,850 |
77,632 |
Annual Cost-Operation ($) |
15,300 |
22,900 |
Rescue value ($) |
8,125 |
17,953 |
Useful life (Years) |
4 |
6 |
Using an interest rate of 25% per year. Do a
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