2. A company can manufacture a product using hand tools. Tools will cost $ 1,000, and the manufacturing cost per unit will be $ 1.50. As an alternative, an automated system will cost $15,000 and the manufacturing cost per unit will be $ 0.50. With an anticipated annual volume of 5,000 units and neglecting interest, the payback period (yr) for the automated system is most nearly (A) 2.8 (B) 3.6 (C) 15.0 (D) never 3. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5 % per year? (A) 2.4 (B) 2.6 (C) 3.3 (D)4.5

2. A company can manufacture a product using hand tools. Tools will cost $ 1,000, and the manufacturing cost per unit will be $ 1.50. As an alternative, an automated system will cost $15,000 and the manufacturing cost per unit will be $ 0.50. With an anticipated annual volume of 5,000 units and neglecting interest, the payback period (yr) for the automated system is most nearly (A) 2.8 (B) 3.6 (C) 15.0 (D) never 3. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5 % per year? (A) 2.4 (B) 2.6 (C) 3.3 (D)4.5

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 4P

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