Solution-How much would the reduction in downtime have to

How much would the reduction in downtime have to be worth

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Reference no: EM132317007

Caine Bottling Corporation is considering the purchase of a new bottling machine . The machine would cost $199 , 060 and has an estimated useful life of 8 years with zero salvage value.

Management estimates that the new bottling machine will provide net* annual cash flows of $35 , 200. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10% .

Calculate the net present value.

How much would the reduction in downtime have to be worth in order for the project to be acceptable?

Reference no: EM132317007

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How much would the reduction in downtime have to be worth

Reference no: EM132317007

Reference no: EM132317007

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