A new machine requires an investment of 500,000 and will generate profits of 100,000 for ten years.

Question:

A new machine requires an investment of €500,000 and will generate profits of €100,000 for ten years. Will the investment have a positive net present value assuming that a realistic interest is 6 per cent?

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

Step by Step Answer:

Related Book For book-img-for-question

Operations Management

ISBN: 9780273708476

5th Edition

Authors: Nigel Slack, Stuart Chambers, Robert Johnston

See More Books

Question Posted: Oct 04, 2023 01:47 PM

See More Questions

Key West Electronics, located in Miami, was just ten years old in early 2010, with sales expected to pass the $500 million and net income just beginning to turn positive after years of losses or near...
In a financial mathematics, investors use utility functions to compare the "joy" of earning money on an investment to the "pain" of losing money on the same investment. Suppose that an investor using...
The management of Saturn Networks Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: The radio station requires an investment of...
The North American and European continents are moving apart at a rate of about 3 cm/y. At this rate how long will it take them to drift 500 km farther apart than they are at present?
Prepare an entity relationship diagram, in good form, for the expenditure cycle, which consists of both purchasing and cash disbursements. Describe the represented by the cardinalities is the...
Using Return Distributions Assume that the returns from holding French shares are normally distributed. From Table 9.2, what is the approximate normal distribution probability that your money will...
Compare the results from Exercise 13 with the results from the EDA and decision tree analysis in Chapters 3 and 6. Discuss similarities and differences. Which analysis format do you prefer? Do you...
At December 31, 2014, Townlynn Corporation reported the stockholders equity accounts shown here (with dollar amounts in millions, except per-share amounts). Common stock $2.00 par value per share,...
The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 1.750 units at $20 each on January 1. Xu purchases 2,000 units at $19 each in February and 950 units at...
Step 1 Make a list of all the jobs you have to do in the next week. Include in this list jobs relating to your work and/or study, jobs relating to your domestic life, in fact all the things you have...
Visit a dance club, bar or pub that has live music or any other similar entertainment venue. (a) How would you manage the environment to ensure the wellbeing and safety of staff? (b) How would you...
Bus bars proposed for use in a power transmission station have a rectangular cross section of height H = 600 mm and width W = 200 mm. The electrical resistivity, c
Hogan Business Systems has a small number of sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During 2011 Hogan...
Bourret Inc. experienced the following events for the first two years of its operations. 2011: 1. Provided $\$ 60,000$ of services on account. 2. Provided $\$ 25,000$ of services and received...
A flowrate of lubricant oil is $5 \mathrm{~kg} / \mathrm{s}$ passing through a Venturi tube. The ratio of areas of the Venturi tube is $0.005 \mathrm{~m}^{2} /0.002 \mathrm{~m}^{2}$. The density...
Sketch on separate axes, in the interval 0 360, the graphs of: In each case show the coordinates of any maximum and minimum points, and of any points at which the curve meets the axes. a y = sec...
The wheel of radius $r=300 \mathrm{~mm}$ rolls to the right without slipping and has a velocity $v_{O}=3 \mathrm{~m} / \mathrm{s}$ of its center $O$. Calculate the velocity of point $A$ on...
Given the following, calculate net change in cash: Net cash flows from operating activities ...............$6,700 Net cash used by investing activities ...................(2,100) Net cash provided by...
Explain the term global capital markets. This chapter primarily discusses global equity markets. What other types of financial instruments are traded in these markets? How important are global...
The 21,000-seat Air East Arena houses the local professional ice hockey, basketball, indoor soccer, and arena football teams as well as various trade shows, wrestling and boxing matches, tractor...
Determine the optimal order quantity and total annual inventory cost for cups in Problem 13-27 if the carrying cost is 5% of the price of a box of cups.
Determine the optimal order quantity and total annual inventory cost for cups in Problem 13-27 if the carrying cost is 5% of the price of a box of cups.
Justice Corporation Comparative Balance Sheet December 31, 2025 and 2024 2025 2024 Assets Current Assets: $ Cash and Cash Equivalents 2,254 $ 1,876 Justice Corporation reported the following...
The Fields Company has two manufacturing departments forming and painting. The company uses the FIFO method of process costing at the beginning of the month the forming department has 33.000 units in...
A comparative balance sheet for Lomax Company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Year Last Year $ 96,000 $ 70,000 640,000 672,500...

A new machine requires an investment of 500,000 and will generate profits of 100,000 for ten years.

Question:

Step by Step Answer:

Yes the investment will have a positive net present value NPV assuming that a realistic interest ...View the full answer

Operations Management

Students also viewed these Business questions