Question
Enzo enterprises is seeking to expand operations and is considering increasing production capacity by purchasing the latest plant and equipment. the following two plants are
Enzo enterprises is seeking to expand operations and is considering increasing production capacity by purchasing the latest plant and equipment. the following two plants are being considered for acquisition as they are technically superior to the current plant and will enable higher production volumes with lower costs input. the finance department has protected the cash flows for the life of the plant and has asked you as the manager to advise The board on which of these plants to acquire. the companies current cost of capital is 12% the following information relates to the plants that are being considered.
initial cost. plant x. plant y 500000 400000 expected life span. 4 years. 4years depreciation. 137500. 100000 Required 1 payback period for both plants 2 net present value for both plants 3 irr
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