XYZ has appraised a project with an expected life of six years using NPV and has calculated the project has a negative NPV of $8,500. Few of the costs are controllable however the production director thinks that labour costs could be reduced. Labour currently costs $25,000 annually and XYZ’s cost of capital is 15%. Calculate to four decimal places what percentage the labour costs must be reduced in order to make the project earn the 15% cost of ca
XYZ has appraised a project with an expected life of six years using NPV and has calculated the project has a negative NPV of $8,500. Few of the costs are controllable however the production director thinks that labour costs could be reduced. Labour currently costs $25,000 annually and XYZ’s cost of capital is 15%. Calculate to four decimal places what percentage the labour costs must be reduced in order to make the project earn the 15% cost of ca
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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Company XYZ has appraised a project with an expected life of six years using
Calculate to four decimal places what percentage the labour costs must be reduced in order to make the project earn the 15% cost of capital.
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