Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. optilux is considering investing in an automated m

OptILux Is considering Investing In an automated manufacturing system. The system requires an InItial Investment...

70.2K

Verified Solution

Question

Accounting

OptILux Is considering Investing In an automated manufacturing system. The system requires an InItial Investment of $5.0
million, has a 20-year life, and will have zero salvage value. If the system Is implemented, the company will save $620,000 per
year In direct labor costs. The company requires a 10% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1)
(Use approprlate factor(s) from the tables provided.)
a. Compute the proposed Investment's net present value.
b. Using the answer from part a, Is the Investment's Internal rate of return higher or lower than 10%? Hint: It is not necessary to
compute IRR to answer this question.
Complete this question by entering your answers in the tabs below.
Compute the proposed investment's net present value.
Net present value
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

A certain mineral used as a food preservative contains 8.242 % potassium, 5.687% aluminum, 5.099% hydrogen,...

Physics
1.2K views

An isolated conducting sphere of radius R has charge Q uniformly distributed on its surface. What...

Biology
1.2K views

Which organism has the lowest cellular complexity and is thought to have evolved first O...

Calculus
1.2K views

Use the Ratio Test to determine the convergence or divergence of the series If the...

Algebra
1.2K views

The axis of symmetry of a parabola Select one O a determines the lowest point...

Algebra
1.2K views

07 03 MC Given the function h x 2x 10 4 what is the x...

Algebra
1.2K views

3 3 2n 5 2n 5 A 9n 64 C 4n 20n 25 B 36n...

Accounting
1.2K views

your company recently issued bonds at a discount. you have been asked to prepare the...

Accounting
1.2K views

Grover Company has the following data for the production and sale of 2,000 units. ...

Accounting
1.2K views

Total direct labour is RM56,450. Total labour hour is 480 hours. What is the direct...

Accounting
1.2K views

In some cases, a deduction is allowed under Division C to compute the taxable income...

Accounting
1.2K views

ifa trust has income required to be distributed of $13,000 other amounts paid or required...