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which plan, if any, should it adopt?

which plan, if any, should it adopt?

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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00 5. 4. 123 456 78 2. 1. Find the present worth of the following cash flow diagram if i= 6%. %3D 9. 7. 3. 6. 350 350 450 000 450 550 550 b09 2. The management of an electronics manufacturing firm believes it is desirable to automate its production facility. The automated equipment would have a 10-year life with no salvage value at the end of 10 years. The plant engineering department has surveyed the plant and has suggested there are eight mutually exclusive alternatives. Initial Cost Net Annual Benefit Plan (thousands) (thousands) $265 $51 220 00 0 305 15 130 23 245 47 33 165 If the firm expects a 8% rate of return, which plan, if any, should it adopt?
Transcribed Image Text:00 5. 4. 123 456 78 2. 1. Find the present worth of the following cash flow diagram if i= 6%. %3D 9. 7. 3. 6. 350 350 450 000 450 550 550 b09 2. The management of an electronics manufacturing firm believes it is desirable to automate its production facility. The automated equipment would have a 10-year life with no salvage value at the end of 10 years. The plant engineering department has surveyed the plant and has suggested there are eight mutually exclusive alternatives. Initial Cost Net Annual Benefit Plan (thousands) (thousands) $265 $51 220 00 0 305 15 130 23 245 47 33 165 If the firm expects a 8% rate of return, which plan, if any, should it adopt?
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