Question

Management are considering a project to buy and operate a major item of equipment. Your boss is extremely enthusiastic about the
project, arguing that (i) it has a very high rate of return and acceptable payback period, and (ii) it will definitely add to shareholder
value. The equipment costs $330,000, is anticipated to be sold at the end of year 5 for $20,000, and will be depreciated straight line
over the five-year period. The equipment will be used to manufacture a new type of electrical switch which will be sold at a price of
$3.95 per unit. Expenses associated with this project other than depreciation can be assumed to be 54% of the sales revenue. The
relevant discount rate is 12.0% and can be assumed to be the hu

Answer 1

Answer:

It is very long question dear

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