A mechanical workshop invested in purchasing a semiautomatic machine for $50,000, that expected to generate a net income of $8,000 starting year 4 and expected to decrease by 5% per year thereafter. The useful life of the machine is 20 years. If the workshop's minimum attractive rate of return (MARR) is 10% per year, the standard notation for determining the discounted payback period is: O 0=-50,000 + 8,000 (P/A, 5%, 10%, np - 3) (P/F, 10%, 3) O 0= -50,000 + 8,000 (P/A, 5%, 10%, np) O 0= -50,000 + 8,000 (P/A, -596, 106, np - 4) (P/F, 10%, 4) O 0= -50,000 + 8,000 (P/A, 5%, 10%, np - 4) (P/F, 10%, 4) O 0= -50,000 + 8,000 (P/A, -56, 106, np) (P/F, 109%, 4) O None of them O 0=-50,000 + 8,000 (P/A, -5%, 10%, np - 3) (P/F, 1096, 3) O 0= -50,000 + 8,000 (P/A, -56, 1096, np) (P/F, 10%, 3)

A mechanical workshop invested in purchasing a semiautomatic machine for $50,000, that expected to generate a net income of $8,000 starting year 4 and expected to decrease by 5% per year thereafter. The useful life of the machine is 20 years. If the workshop's minimum attractive rate of return (MARR) is 10% per year, the standard notation for determining the discounted payback period is: O 0=-50,000 + 8,000 (P/A, 5%, 10%, np - 3) (P/F, 10%, 3) O 0= -50,000 + 8,000 (P/A, 5%, 10%, np) O 0= -50,000 + 8,000 (P/A, -596, 106, np - 4) (P/F, 10%, 4) O 0= -50,000 + 8,000 (P/A, 5%, 10%, np - 4) (P/F, 10%, 4) O 0= -50,000 + 8,000 (P/A, -56, 106, np) (P/F, 109%, 4) O None of them O 0=-50,000 + 8,000 (P/A, -5%, 10%, np - 3) (P/F, 1096, 3) O 0= -50,000 + 8,000 (P/A, -56, 1096, np) (P/F, 10%, 3)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 3P

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