economics problem, Business Economics

Assignment Help:
The manager of a movie production company is thinking of investing in new graphics computers for a price of $325,000. The computers are expected to have a useful life of 3 years. The machine is expected to save the firm $200,000 in the first year, $180,000 in the second year, and $60,000 in the third year. At the end of 3 years, a junk dealer would be willing to purchase the machine for $20,000. Alternatively, the manager could skip the machine, and invest the $325,000 at a guaranteed interest rate of 5%. Which choice is more profitable for the manager, buying the computers or investing the money at 5%?

Related Discussions:- economics problem

Law of commerce, Hatfield owned a large farm on which he grew grain. His co...

Hatfield owned a large farm on which he grew grain. His combine was inadequate in relation to the acreage of grain that he harvested annually. As a result, on several occasions his

PROCESS CHART, INVESTIGATE AND FIND SOLUTION TO HOUSEKEEPING SAFETY PROCESS...

INVESTIGATE AND FIND SOLUTION TO HOUSEKEEPING SAFETY PROCESS WITH LAYOUT IN PLANT, WHAT PROCESS CHARTS WILL NEED TO SOLVE THIS PROBLEM

Forms of market efficiency, Question 1: What are the main predictions o...

Question 1: What are the main predictions of the Capital Asset Pricing Model (CAPM)? Discuss the role and significance of the assumptions needed to obtain the predictions.

Household sector, The prevention of main swings in economic activity can be...

The prevention of main swings in economic activity can be handled most simply by the household sector. Explain why?

OLIGOPOLY, EXPLAIN WHY INTERDEPENDENCE IN OLIGOPOLY RESULTS IN A TENSION BE...

EXPLAIN WHY INTERDEPENDENCE IN OLIGOPOLY RESULTS IN A TENSION BETWEEN COOPERATION AND COMPETITION.

Foreign Direct Investment, Why do all multinational automakers choose to us...

Why do all multinational automakers choose to use FDI to enter this industry? What are the drawbacks of using other entry modes such as exporting and licensing?

What is Aid, What is aid? Aid is the administered transfer of resource...

What is aid? Aid is the administered transfer of resources by a donor country or international agency or non-government organisation to less developed countries to encourage e

What is suitable technology, What is suitable technology? Technology is...

What is suitable technology? Technology is suitable when this employs methods which make the best use of accessible resources that is labour-intensive, straightforward techniqu

Can comparative benefit change over time, Can comparative benefit change ov...

Can comparative benefit change over time? Comparative benefit is a dynamic concept. A country can obtain or lose comparative advantage overtime when there is a change within r

Write Your Message!

Captcha
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