Create a spreadsheet to compute the npv and payback period

Reference no: EM13486061

Create a spreadsheet to compute the NPV and payback period to assist with a purchase decision. Use to results to answer questions about your findings.

Scenario: Amazon.com is planning to purchase a new bar-coding machine for one of its warehouses. You have been asked to prepare a simple analysis to determine whether Amazon should purchase the machine. The bar coding machine costs $60,000. It has a 5 year economic life and an estimated residual value of $10,000. The estimated annual net cash flow from the machine is $16,000. Amazon.com's required rate of return is 16%.

Once the spreadsheet is completed answer the following questions:

1. What is the machine's NPV?

2. What is the machine's payback period?

3. Should Amazon.com purchase the machine? Why or why not?

Reference no: EM13486061

Questions Cloud

A company purchased 2000 of merchandise on nov 2 with terms : a company purchased 2000 of merchandise on nov. 2 with terms 210 n30. on nov. 8 it returned 500 worth of merchandise.

The arlington property development co has a 10000 note : the arlington property development co. has a 10000 note receivable from a customer due in 3 years. how much is the

You have a quick ratio of 200x 31500 in cash 17500 in ar : you have a quick ratio of 2.00x 31500 in cash 17500 in ar some inventory total current assets of 70000amp total current

Prepare the following budgets for march 2012a revenues : budgetschedulesforamanufacturer.logospecialtiesmanufacturesamongotherthingswoolen blankets for the athletic teams of

Create a spreadsheet to compute the npv and payback period : create a spreadsheet to compute the npv and payback period to assist with a purchase decision. use to results to answer

Lee provo is paid 20 per hour plus time-and-one-half for : on january 1 2012 phil sonics corporation issued 2000000 of 7.5 bonds dated january 1. interest is payable

A company had expenses other than cost of goods sold of : 1.a company had sales of 699000 and cost of goods sold of 280000. its gross profit

Investment securities of 10000 these securities are common : a company reports the following information as of the end of the year. investment securities of 10000. these securities

The ceo of smart phone cases llc is preparing a loan : the ceo of smart phone cases llc is preparing a loan application to be used for expansion. using the data below only

User Account

All Pages