The plant manager of Orlando Electronics Company is considering the purchase of new automated assembly...
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Accounting
The plant manager of Orlando Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $255,000. The manager believes that the new investment will result in direct labor savings of $51,000 per year for 10 years.
Year
6%
10%
12%
15%
20%
1
0.943
0.909
0.893
0.870
0.833
2
1.833
1.736
1.690
1.626
1.528
3
2.673
2.487
2.402
2.283
2.106
4
3.465
3.170
3.037
2.855
2.589
5
4.212
3.791
3.605
3.353
2.991
6
4.917
4.355
4.111
3.785
3.326
7
5.582
4.868
4.564
4.160
3.605
8
6.210
5.335
4.968
4.487
3.837
9
6.802
5.759
5.328
4.772
4.031
10
7.360
6.145
5.650
5.019
4.192
a. What is the payback period on this project? fill in the blank 1 of 1 years
b. What is the net present value, assuming a 10% rate of return? Use the table provided above. Round to the nearest whole dollar. Net present value fill in the blank 1 of 1$
c. What else should the manager consider in the analysis?
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