Acceptable project using simple payback period method

Assignment Help Business Management
Reference no: EM131075070

Your company evaluates proposals using a 4-year payback period guideline [that is, projects must have a payback of 4 years or less in order to be recommended]. You are investigating two alternatives for a new routing machine. Alternative-I has a first cost of $10,000, will last ten years, and will save the company $2,000 in Year-1 and $1,500 in both Year-2 and Year-3. Alternative-II costs $15,000, will also last ten years, and will save $7,000 in Year-1, and 3,000 in Year-2. Assume an MARR of 10%.

(a) What minimum savings in Year-4 are needed to make Alternative-I an acceptable project using Simple Payback Period Method?

(b) If the savings in Year-3 and Year-4 for Alternative-II will be equivalent, what size would they have to be in order for the project to be acceptable using the Discount Payback Period Method?

Reference no: EM131075070

Questions Cloud

Prepare a summary on the firms overall financial performance : Prepare an executive summary on the firm's overall financial condition and performance. Your summary must be at least one page, but no more than 3 pages.
Fixed rate mortgage : You have been relocated from Cleveland to San Francisco to begin your new career in finance. The relocation company offers you 3-2-1 Buy Down Financing. The primary home you find has a value of $729,000. You have a 8% down payment on a 30-year Fixed ..
Compute the cash balance at the end : Compute the cash balance at the end of the first year for Alpaca Corporation.
Company cost of equity capital : Dybvig Corporation's common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and the expected return on the market is 13 percent, what is the company's cost of equity capital?
Acceptable project using simple payback period method : What minimum savings in Year-4 are needed to make Alternative-I an acceptable project using Simple Payback Period Method? If the savings in Year-3 and Year-4 for Alternative-II will be equivalent, what size would they have to be in order for the pro..
Briefly describe the technologies : Question 2. In about 100 words, describe the function of the Internet Corporation for Assigned Names and Numbers. Include a discussion of the differences between gTLDs and sTLDs in your answer.
Historical income statement performance for company xyz : Must be completed in an excel document. The following table summarizes historical income statement performance for Company XYZ. Utilizing the historical information provided and the assumptions outlined below, prepare a budget for the upcoming fis..
Perfectly competitive industry is in long-run equilibrium : Suppose that a perfectly competitive industry is in long-run equilibrium and experiences an increase in production cost. Who will bear the burden of the increase? Is this fair?
What did managed care look like 10 years ago : What did managed care look like 10 years ago compared to how it looks today? Discuss the future of managed care.

Reviews

Write a Review

Business Management Questions & Answers

  A step in the straight rebuy buyclass?

a step in the straight rebuy buyclass?

  Students will choose a company of their liking

Students will choose a company of their liking and use any of the 2 (qualitative or quantitative) research and analysis methods to demonstrate selected perceptions (approved by the faculty) of the company.

  Develop the skills that you do not currently possess

What skills do you possess that are needed to be successful in each position, and what skills do you need to develop - How can you develop the skills that you do not currently possess?

  Describe how elrod repair service should record the land

On July 25, Elrod Repair Service accepted the seller's counteroffer of $112,000. Describe how Elrod Repair Service should record the land.

  Creating ads for tv-radio and the newspaper

Outrage from parents about allowing these ads to be shown and Outrage from religious communities who are strongly against Euthanasia.

  What factors are important for consideration in determining

You are a department manger with a need to help create an inter-department work team. You have just completed an internal seminar of developing effective work teams and want to put that information to use for this project.

  Process of anticipating future events in organizations

The process of anticipating future events and conditions and determining the best way to achieve organizational objectives is known as:

  Are states beholden to washingtondo you believe that

are states beholden to washington?do you believe that washington has taken the lead in policy creation and

  Strategies for ford motor companyrecommend a strategy or

strategies for ford motor companyrecommend a strategy or combination of strategies the organization should implement

  How a companys culture can affect its quality performance

Show how a company's culture can affect its quality performance from both a positive and negative manner.

  Direct labor rate variance

Which one of the following is the difference between the actual hourly wage rate and the standard hourly wage rate, multiplied by the actual direct labor hours worked during a period

  Evaluating mission statement - nissan

Evaluate NIssan's mission statement. Indicate whether the mission statement includes the respective components and why?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd