Question
Big Sky Company expects a demand of 30 000 units per year for a special purpose component for six years. Net return per unit is
Big Sky Company expects a demand of 30 000 units per year for a special purpose component for six years. Net return per unit is $4.10. To produce the component, the company must buy a machine costing $245 000 with a life of six years and a salvage value of $47 000 at year Six. The company estimates that repair costs will be $18 500 per year during Years 2 to 6. If Big Sky Company requires a return on investment of 15.5%, should it market the component?
**Use CF and NPV function for this question**
(need only a programmed solution acc to instruction asap. will upvote)
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