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Show Me How Cash Payback Penod, Net Present Value Analysis, and Qualitative Considerations The plant manager of Shenzhen Electronics Company is considering the purchase of
Show Me How Cash Payback Penod, Net Present Value Analysis, and Qualitative Considerations The plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment wit cost $275,000. the manager believes that the new invenant will be savings of $69,000 per year for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 6.210. 5.335 4.968 4.487 3.837 9 6.802 5759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. What is the payback period on this project? 4 years b. What is the net present value, assuming a 12% rate of return? Use the table provided above. Round to the nearest whole dollar. Net present value 389,850 X e. What else should the manager consider in the analysis Taxes and Maintenance costs Divide the amount to be invested by the annual net cash flow. Subtract the cost from the present value of the annual net cash flow. Use the present value of an annuity factor for 10 periode at 12% (efer to the Consider all cash flows. ALOO ALDO ALGO . ECO SALOO TALDO PRO WEZA MATE 4 EXILE EXCEL ALBO KE 1221 EXCALGO . NEE AMA 6379 300 a h QT 13 2 C Ona w 2013-03
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