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What is the payback period for the flexible manufacturing

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Reference no: EM132565286

Barker Production Company is considering the purchase of a flexible manufacturing system. The annual cash benefits/savings associated with the system are:

Decreased waste$ 75,000

Increased quality100,000

Decrease in operating costs62,500

Increase in on-time deliveries12,500

The system will cost $750,000 and will last ten years. The company's cost of capital is 10%.

Required:

Question A. What is the payback period for the flexible manufacturing system?

Question B. What is the NPV for the flexible manufacturing system?

Reference no: EM132565286

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