(Solution Download) The plant manager of Shenzhen Electronics Company is considering the


The plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $1,400,000. The manager believes that the new investment will result in direct labor savings of $350,000 per year for 10 years.
a. What is the payback period on this project?
b. What is the net present value, assuming a 10% rate of return? Use the present value of an annuity of $1 table in Exhibit 5.
c. What else should the manager consider in the analysis?

 







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