Managers are often correct that the company would benefit from advanced manufacturing technology.However,the present value of future cash flows analysis usually results in a negative net present value for the investment because of the

Question

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The present value of future cash flows analysis considers the initial investment, future cash inflows and outflows, and the required rate of return to calculate the net present value of an investment. In the case of advanced manufacturing technology, the hurdle rate may be set too high, leading to a negative net present value. In addition, there may be uncertainty about the operating cash flows, making it challenging to estimate the expected returns accurately. Moreover, some benefits, such as improved product quality or increased customer satisfaction, may be difficult to quantify and thus excluded from the analysis. Therefore, all of the above options contribute to a negative present value of future cash flows analysis for an investment in advanced manufacturing technology.

Managers Are Often Correct That the Company Would Benefit from Advanced