Mutually exclusive alternatives for a new polisher

Assignment Help Financial Management

Reference no: EM131518836

Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each alternative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,465. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of $1,770. Polisher 3 requires an initial investment of $15,000 and provides annual benefits of $3,580. MARR is 15%/year.

Show the comparisons and internal rates of return used to make your decision.

Reference no: EM131518836

Questions Cloud

Managers need to pay attention to timing of cash flows : Briefly explain why financial managers need to pay attention to the TIMING of cash flows.

What are two most important decisions of financial managers : What are the two most important decisions of financial managers?

The required payback period : The required rate of return is 10% and the required Payback Period is 2 years.

The margin of safety : The unit sales price is $90, unit variable cost is $45, and the fixed costs per month are $5,000. The margin of safety is

Mutually exclusive alternatives for a new polisher : Final Finishing is considering three mutually exclusive alternatives for a new polisher.

New equipment instead of keeping their current equipment : What is the difference in net present values if Nautical Creations buys the new equipment instead of keeping their current equipment?

Decrease the interest rate required by investors : Which of the following bond provisions or factors would tend to decrease the interest rate required by investors?

These rates on the spot exchange market : How could you profit if you see these rates on the spot exchange market? e$/£ = 1.6; e$/Fr = 0.6; eFr/£ = 3.2.

Maximum sustainable growth rate for company : What is the maximum sustainable growth rate for this company?

User Account

All Pages