Zeus Products needs to purchase a new machine The machine costs $27,000 and will reduce operating costs by $3,500 per year The company is able to sell their old machine for $4,500 What is the payback period in years Enter the value with 2 decimals Answer A company is deciding if they want to invest $90,000 in a machine that will result in a cost reduction of $20,000 in each of 8 years The company can earn a rate of return of 12 by investing its money elsewhere At the end of the 8 years, the machine will have no salvage value The present value for an annuity for 8 years at 12 Is 4 968 and the present value for a dollar at 8 years and 12 is 0 404 What is the net present value of the investment Answer When a company makes a capital budgeting decision, all of the following would be examples of questions they would ask except Should we purchase a new facility to increase production Should we purchase a new machine to reduce costs Should we purchase or lease a new machine Should we purchase more raw material to increase production Which of the following statements is incorrect related to net present value If a net present is positive, then the project should be accepted If a net present value is negative, then the project should be rejected If a net present value is positive, the return is greater than the required rate of return If a net present value is negative, the required rate of return is less than the return If a $200,000 investment has a project profitability index of 0 30, what is the net present value of the project $30,000 $170,000 $140,000 $60,000 Zora Manufacturing needs to purchase a new machine The machine costs $12,000 and will reduce operating costs by $4,000 per year The company is able to sell their old machine for $1,500 What is the payback period, rounded to the nearest 2 decimals 3 years 2 63 years 5 33 years 8 years A company is deciding if they want to invest $40,000 in a machine that will result in a cost reduction of $7,000 in each of 10 years The company can earn a rate of return of 10 by investing its money elsewhere At the end of the 10 years, the machine will have no salvage value The present value of an annuity for 10 years at 10 is 6 145 and the present value of a dollar at 10 years at 10 is 0 386 What is the net present value of the investment $30,000 $12,980 $3,015 None of the choices listed

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Zeus Products needs to purchase a new machine. The machine costs $27,000 and will reduce operating costs by $3,500 per year. The company is able to sell their old machine for $4,500. What is the payback period in years? Enter the value with 2 decimals.

Answer:___________

A company is deciding if they want to invest $90,000 in a machine that will result in a cost reduction of $20,000 in each of 8 years. The company can earn a rate of return of 12% by investing its money elsewhere. At the end of the 8 years, the machine will have no salvage value. The present value for an annuity for 8 years at 12%. Is 4.968 and the present value for a dollar at 8 years and 12% is 0.404. What is the net present value of the investment?

Answer:___________

When a company makes a capital budgeting decision, all of the following would be examples of questions they would ask except:
1. Should we purchase a new facility to increase production?
2. Should we purchase a new machine to reduce costs?
3. Should we purchase or lease a new machine?
4. Should we purchase more raw material to increase production?

Which of the following statements is incorrect related to net present value?
1. If a net present is positive, then the project should be accepted
2. If a net present value is negative, then the project should be rejected
3. If a net present value is positive, the return is greater than the required rate of return
4. If a net present value is negative, the required rate of return is less than the return

If a $200,000 investment has a project profitability index of 0.30, what is the net present value of the project?
1. $30,000
2. $170,000
3. $140,000
4. $60,000

Zora Manufacturing needs to purchase a new machine. The machine costs $12,000 and will reduce operating costs by $4,000 per year. The company is able to sell their old machine for $1,500. What is the payback period, rounded to the nearest 2 decimals?
1. 3 years
2. 2.63 years
3. 5.33 years
4. 8 years

A company is deciding if they want to invest $40,000 in a machine that will result in a cost reduction of $7,000 in each of 10 years. The company can earn a rate of return of 10% by investing its money elsewhere. At the end of the 10 years, the machine will have no salvage value. The present value of an annuity for 10 years at 10% is 6.145 and the present value of a dollar at 10 years at 10% is 0.386. What is the net present value of the investment?
1. $30,000
2. -$12,980
3. $3,015
4. None of the choices listed