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What is the payback period on this project

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Problem - Payback period, net present value analysis, and qualitative considerations - The plant manager of Jurassic Industries is considering the purchase of new automated assembly equipment. The new equipment will cost $2,375,000. The manager believes that the new investment will result in direct labor savings of $500,000 per year for 10 years.

Required -

a. What is the payback period on this project?

b. What is the net present value, assuming a 10% rate of return? Use the present value tables appearing in this chapter.

c. What else should the manager consider in the analysis?

Reference no: EM132706982

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