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An SME dedicated to the manufacture of cassava flour, is considering the purchase of a...

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Accounting

An SME dedicated to the manufacture of cassava flour, is considering the purchase of a packing house, to reduce labor costs in filling bags with the product. The reference rate to be used is 13.8%. The following amounts for costs and income are estimated: Baler price: P = CRC15087000. Reduction of labor costs the first year: A = CRC4407000. The labor cost reduction is increased by G = CRC505000 each year. The supplier guarantees to recognize an amount of F = CRC6428000 at any time that the packing house wants to be delivered to buy a higher capacity one, in the next 10 years. As part of the payback period calculation, you initially consider term options corresponding to whole numbers of years. You want to know how different the present value of the full-year option, which is closest to the exact payback period, will be from the break-even point. For this, indicate the absolute value of the present value corresponding to said option with an entire annual term.

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