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Vinil7 [7]
2 years ago
7

Buff is considering a new packaging machine. The initial cost is $10,000 and we would save $4,000 per year in labor costs. If ou

r MARR is 12% and our projects must have a 3-year discounted payback period, should we purchase this packaging machine?
Yes
No
Not enough nformation to answer.
Business
1 answer:
vivado [14]2 years ago
8 0

Answer:

NO

Explanation:

Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows

For the machine to be accepted, the total amount invested should be recovered in three years or less

Amount recovered = - cost of the project + discounted value of the cash flow

Amount recovered in year 1 = -10,000 + (4000 / 1.12) = -6,428.57

Amount recovered in year 2= -6,428.57 - (4000/ 1.12^2) = -3239.74

Amount recovered in year 3=  -3239.74 + (4000/ 1.12^3) = -392.62

the project would not be accepted because the amount invested would not be recovered within 3 years

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D. Spending on services is smaller than the amount of consumption spending on durable and nondurable goods.

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For developed countries like the U.S, there is a lot of stress in consumption of services such as good health care, appropriate and quality education and among others. These services contribute to a larger proportion of consumption component of GDP than both durable and nondurable commodities. Therefore, the statement “spending on services is smaller than the amount of consumption spending on durable and non-durable goods” is not correct

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<h3>What is economy ?</h3>

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One's culture, values, education, technological advancement, history, social organization, political structure, legal system, and natural resources are all major determinants of an economy's processes. These elements determine the parameters and conditions under which an economy operates in addition to providing background and content. In other words, the economic realm is a social domain made up of connected human behaviors and exchanges that cannot exist independently.

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