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28 Sep 2019
Heels, a shoe manufacturer, is evaluating the costs and benefitsof new equipment that would custom fit each pair of athletic shoes.The customer would have his or her foot scanned by digital computerequipment; this information would be used to cut the raw materialsto provide the customer a perfect fit. The new equipment costs$111,000 and is expected to generate an additional $44,000 in cashflows for 5 years. A bank will make a $111,000 loan to the companyat a 12% interest rate for this equipmentâs purchase. Use thefollowing table to determine the break-even time for thisequipment. All cash flows occur at year-end. (PV of $1, FV of $1,PVA of $1, and FVA of $1) (Use appropriate factor(s) fromthe tables provided.)
Chart Values are Based on: i = Year Cash Inflow (Outflow) x PV Factor = Present Value Cumulative Present Value of Inflow (Outflow) 0 $(111,000) x 1.0000 = $(111,000) $(111,000) 1 = 2 = 3 = 4 = 5 =
Heels, a shoe manufacturer, is evaluating the costs and benefitsof new equipment that would custom fit each pair of athletic shoes.The customer would have his or her foot scanned by digital computerequipment; this information would be used to cut the raw materialsto provide the customer a perfect fit. The new equipment costs$111,000 and is expected to generate an additional $44,000 in cashflows for 5 years. A bank will make a $111,000 loan to the companyat a 12% interest rate for this equipmentâs purchase. Use thefollowing table to determine the break-even time for thisequipment. All cash flows occur at year-end. (PV of $1, FV of $1,PVA of $1, and FVA of $1) (Use appropriate factor(s) fromthe tables provided.)
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Irving HeathcoteLv2
28 Sep 2019