Merrill Productions is considering the purchase of a new movie camera,which will be used for major motion pictures.The new camera will cost $30,000,have an eight-year life,and create cost savings of $5,000 per year.The new camera will require $700 of maintenance each year.Merrill Productions uses a discount rate of 9 percent.
Present value tables or a financial calculator are required.
a. Compute the net present value of the new camera
b. Determine the payback period.

Question

Merrill Productions is considering the purchase of a new movie camera,which will be used for major motion pictures.The new camera will cost $30,000,have an eight-year life,and create cost savings of $5,000 per year.The new camera will require $700 of maintenance each year.Merrill Productions uses a discount rate of 9 percent.
Present value tables or a financial calculator are required.
 a. Compute the net present value of the new camera
b. Determine the payback period.

Quizplus · Accepted Answer

The Answer of Merrill Productions is considering the purchase of a new movie camera,which will be used for major motion pictures.The new camera will cost $30,000,have an eight-year life,and create cost savings of $5,000 per year.The new camera will require $700 of maintenance each year.Merrill Productions uses a discount rate of 9 percent.
Present value tables or a financial calculator are required.
 a. Compute the net present value of the new camera
b. Determine the payback period.

Merrill Productions Is Considering the Purchase of a New Movie