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How low could the new lighting system annual savings be

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Reference no: EM133184744

Question - Samsung board or directors is considering the replacement or the company lightning system. The old system requires two people to operate it, but the new system would require only a single operator. The new lighting system will cost P129,750 and save the company P27,000 annually for the next eight years.

Required -

1. Compute the net present value if the minimum required rate of return is 8%

2. How low could the new lighting system's annual savings be and still justify acceptance of the proposal by the board of directors if the hurdle rate is 8 percent?

Reference no: EM133184744

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