Reference no: EM13381199

1. You are considering employing manufacturing workers in Japan in 1987. Directly analogous workers for an activity expected to take the same number of hours of work cost $750,000 in USA in 1982. How much should you expect to pay for the labour?

2. A project is estimated in the face of an interest rate of 10%. Find the present equivalent amount for each possible outcome.
What would you investigate to determine whether you should proceed with the project?

	Optimistic	Most likely	Pessimistic
Investment	$50,000	$58,000	$65,000
Service life	8 years	6 years	4 years
Salvage value	$20,000	$16,000	$10,000
Net annual return	$22,000	$14,000	$10,000

3. The best estimates for an investment are as below. For a range of interest rates from 5% to 25% would your advice concerning whether to proceed with the project change? Why?

Initial investment	$180,000
Estimated life	10 years
Salvage value	$12,000
Net annual return	$45,000