Exercise You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You have determined the costs and benefits of the investment below. The investment has no residual value. a) Prepare a cash flow statement b) Calculate the present value of the investment. c) What is the internal interest rate of the investment? d) What is the interest-bearing repayment period of the investment day e) Is the investment profitable? Justify. Use Excel formulas and functions in invoices. Investment equipment €1,000,000 software €300,000 -cabling €10,000 furnishings €25,000 Annual costs personnel costs €280,000 training €20,000 related material €20,000 Annual returns reduction of losses by €300,000 reduction of inventories by €150,000 personnel costs €360,000

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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Exercise
You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The
investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You
have determined the costs and benefits of the investment below. The investment has no residual value.
a) Prepare a cash flow statement
b) Calculate the present value of the investment.
c) What is the internal interest rate of the investment?
d) What is the interest-bearing repayment period of the investment day
e) Is the investment profitable? Justify.
Use Excel formulas and functions in invoices.
Investment
equipment €1,000,000
software €300,000
-cabling €10,000
furnishings €25,000
Annual costs
personnel costs €280,000
training €20,000
related material €20,000
Annual returns
reduction of losses by €300,000
reduction of inventories by €150,000
personnel costs €360,000
Transcribed Image Text:Exercise You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You have determined the costs and benefits of the investment below. The investment has no residual value. a) Prepare a cash flow statement b) Calculate the present value of the investment. c) What is the internal interest rate of the investment? d) What is the interest-bearing repayment period of the investment day e) Is the investment profitable? Justify. Use Excel formulas and functions in invoices. Investment equipment €1,000,000 software €300,000 -cabling €10,000 furnishings €25,000 Annual costs personnel costs €280,000 training €20,000 related material €20,000 Annual returns reduction of losses by €300,000 reduction of inventories by €150,000 personnel costs €360,000
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