A company that manufactures high-speed submersible rotary indexing spindles is considering upgrading the production equipment to reduce

Question:

A company that manufactures high-speed submersible rotary indexing spindles is considering upgrading the production equipment to reduce costs over a 6-year planning horizon. The company can invest $80,000 now, 1 year from now, or 2 years from now. Depending on when the investment is made, the savings will vary. That is, the savings will be $25,000, $26,000, or $29,000 per year if the investment is made now (year 0), in 1 year, or in 2 years, respectively. Will the timing of the investment affect the request to make at least a 20% per year return? Use future worth analysis.


Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

Question Posted: