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

Why is the growth rate and significant for development, Why is the growth r...

Why is the growth rate and significant for development? The rate of economic development is the percentage increase within real GDP over twelve months. • The higher rate of

Compute the lp valuation, Consider another company, Lateco, which has just ...

Consider another company, Lateco, which has just received its fifth round of investment.  These rounds have been: Series A: CP ($5M FV) or converts to 5M shares of common. Se

Calculate the npv and irr, You are evaluating a project in the country of E...

You are evaluating a project in the country of Expropriationstan. You estimate end-of-year cash flows as follows. Assume your discount rate for evaluating projects of this sort in

Test marketing, explain ththe test marketing approaches followed by fmcg co...

explain ththe test marketing approaches followed by fmcg companys

What are harrod-domar restrictions, What are Harrod-Domar restrictions? ...

What are Harrod-Domar restrictions? Harrod-Domar restrictions: • Non economic social, cultural, political and institutional circumstances are unimportant into growth pro

Is there a consensus view on responsibility of government, Is there a conse...

Is there a consensus view on the responsibility of government? Highly controversial and depends onto your view like to whether markets work. International agencies as like the

Final Project #2, I do not understand what to do when it comes to the quest...

I do not understand what to do when it comes to the questions for the Social Responsibility and the Stakeholders on the Clean Power Company which is based in Cincinnati, Ohio has b

Primary and Secondary Markets, What would primary markets look like in abse...

What would primary markets look like in absence of secondary markets?

Procurement and delivery strategies, The Scenario You have just been app...

The Scenario You have just been appointed as the procurement consultant for a large multinational with operations based in Brisbane. Your superior, the Chief Financial Officer (

Find the payback period irr-npv, Your company's cost of capital is 12%. You...

Your company's cost of capital is 12%. You are currently evaluating three projects that have the following cash flow streams: Project 0 1

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