Answer:
Payback is 5 years. The company should purchase the plant as payback occurs before the replacement date.
Explanation:
If a project has equal annual cash-flows, the payback period can be calculated using the formula:
As such:
McAlister Products, will consider this machine profitable, and worth investing in if payback occurs before the investment's replacement date. In other words, the company should purchase this plant if payback period is less than 7 years. From the calculation above, payback period is 5 years which is less than 7 years. The company should thus purchase this plant.
Steve owns a bike store, his total costs are $1.2 million per year. Last year, Steve sold 1,200 bikes. Steve's average total cost was $1,000 per bike.
To solve: take the total costs of $1.2 million and divide it by the number of bikes sold, $1,200
Average total cost = 1,200,000/1,200
Average total cost = $1,000
Howell commited a crime of using company resources and will be sued and tried and pressed.
F
because it looks more reasonable and understandable to understand