Barker Production Company is considering the purchase of a flexible manufacturing system. The after-tax cash benefits/savings associated with the system are as follows:
The system will cost £750,000 and will last ten years. The company's cost of capital is 10 percent.
Required:
a.
What is the payback period for the flexible manufacturing system?
b.
What is the NPV for the flexible manufacturing system?
c.
What is the IRR for the flexible manufacturing system?
Correct Answer:
Verified
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