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Hatcher-co has 2 options in front of them 1/ Purchase a robotic system for $500,000 which includes a down payment of 100,000 and yearly payments
Hatcher-co has 2 options in front of them 1/ Purchase a robotic system for $500,000 which includes a down payment of 100,000 and yearly payments starting the next year out of 100,000 each. 2/ Hire 3 employees to do the job of the robotic system. The employees will earn 28,000 a year plus 10% benefits. As well each employee will look for a 3% raise every year Revenues will be 150k a year for the foreseeable future. Hatcher-Co believes a discounted rate of 10% makes sense for their investments Using Discounted Cash Flows which above choice gives Hatcher-co the best retur? graph - B
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