Westside LLC is considering buying a new punch that would allow them to produce

Question

Westside LLC is considering buying a new punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $90,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $2,000 using the gang punch, but annual raw material costs would decrease $12,000. MARR is 6 percent/year. What is the future worth of this investment? What is the decision rule for judging the attractiveness of investments based on future worth? Should they buy the punch?

Important: Please complete in Excel AND upload to https://www.file.io/
Hightlight answer. I will make sure to give instant postive feedback

Explanation / Answer

Since Future worth is postive buy the punch

Use the link below to download the file

Intial Investment =-90000*(1.06)^15 -215690.24 Saving In cost (12000-2000)* FV factor23.2760 232759.70 investments based on future worth 17069.46

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.