Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If a new canning technology costs $300,000, lasts 6 years, and generates year-end, cost savings of $50,000 in each of the first 3 years and

If a new canning technology costs $300,000, lasts 6 years, and generates year-end, cost savings of $50,000 in each of the first 3 years and $60,000 in each of the last 3 years, should the firm buy the technology if the interest rate of 5.0%? (select all that apply)

a) No, The NPV of the technology is negative

b) No, the manager would be better off investing the 300,000 at 5%

c) yes, the tech saves $330,000

d) yes, The NPV is positive

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Applied Regression Analysis And Other Multivariable Methods

Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg

5th Edition

1285051084, 978-1285963754, 128596375X, 978-1285051086

Students also viewed these Economics questions