Question
A Six Sigma project needs an initial investment of $20,000 at July 2013, which includes training fee, consulting fee,s and other expenses. The costs and
A Six Sigma project needs an initial investment of $20,000 at July 2013, which
includes training fee, consulting fee,s and other expenses. The costs and benefits of
this project is listed in the following table:
If the capital cost within the company is i=10% per year.
a) By using NPV, is this project worthwhile?
b) What is the project’s IRR?
c) What is this project’s payback period (in mont
July 1 2013 Cost $20k Benefit 0 Time Oct 1 2013 4.5k 3.5k Jan 1 2014 1.5k 5.5k Apr 1 July 1 2014 2014 1.5k 0 4.5k 4.5k Oct. 1 2014 0 4.5k Jan 1 2015 0 4.5k Apr 1 2015 0 4.5k July 1 2015 0 4.5k
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To determine whether the project is worthwhile we can calculate its Net Present Value NPV Internal R...
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Operations Management Creating Value Along the Supply Chain
Authors: Roberta S. Russell, Bernard W. Taylor
7th Edition
9781118139523, 0470525908, 1118139526, 978-0470525906
