Question
The XYZ Company is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60 000 and its annual
The XYZ Company is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60 000 and its annual operating cost is $2 675.40. The machine has a life of 7 years, and it is expected to generate $15 000 in revenues in each year of its life. MARR is set at 20%.
What is the Rate of Return of the acquisition?
a. Write answer in percentage value, up to 2 decimal places.
b. How much is the cash flow excess?Roundoff answer to whole number.
c. The NPV of the investment is.Roundoff answer to whole number.
d. Payback Period is.Write answer in two decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Reporting And Analysis
Authors: Lawrence Revsine, Daniel Collins
5th Edition
0078110866, 978-0078110863
