Question
Galaxy Inc.was established since 2010 and will be celebrating its 10th anniversary next year. With that in mind, the board of directors proposed that Galaxy
Galaxy Inc.was established since 2010 and will be celebrating its 10th anniversary next year. With that in mind, the board of directors proposed that Galaxy Inc.to enhance LED lightings by adding non-explosive cover. The new improved LED ligon hts will be known as EX LED. In order to produce EX-LED, Galaxy Inc. neeneed to invest on new molding machine which cost $50,000 with required rate of return of 15%. The details of the new product line is as follows:
Year | Initial Cost and Book Value | Annual Net After Tax Cash Flows | Annual Net Income |
0 | $50,000 | ||
1 | $50,000 | $70,000 | $30,000 |
2 | $50,000 | $60,000 | $40,000 |
3 | $50,000 | $50,000 | $35,000 |
4 | $50,000 | $40,000 | $25,000 |
5 | $50,000 | $30,000 | $20,000 |
Analyse appraisal on investment for production of new product line. Using time variant or time invariant approach.
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