The manufacture of equipment costs $73,000 per year. An engineer finds that by spending $16,000 now to reconfigure the production line, the cost of manufacturing will decrease to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, which of the following Excel functions that is used to determine the savings (present worth) due to the reconfiguration? (Hint: Include the reconfiguration cost.) Click the answer you think is right. PV(0.1,5,-73000)-(PV(0.1,4,-1)&PV(0.1,2,-1)&52000)PV(0.1,1,-58000)16000)) PV(0.1,5,-73000)-H(PV(0.1,4,-1)&PV(0.1,1,-2)&52000)PV(0.1,1,-58000)PV(0.1,1,-16000)) PV(0.1,5,-73000)-(PV(0.1,4,-1)&PV(0.1,1,-1)&52000)PV(0.1,1,-58000)16000)) NPV(0.1,5,-73000)-(((PV(0.1,4,-1)&PV(0.1,2,-1)&52000)PV(0.1,1,-58000)16000))

The manufacture of equipment costs $73,000 per year. An engineer finds that by spending $16,000 now to reconfigure the production line, the cost of manufacturing will decrease to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, which of the following Excel functions that is used to determine the savings (present worth) due to the reconfiguration? (Hint: Include the reconfiguration cost.) Click the answer you think is right. PV(0.1,5,-73000)-(PV(0.1,4,-1)&PV(0.1,2,-1)&52000)PV(0.1,1,-58000)16000)) PV(0.1,5,-73000)-H(PV(0.1,4,-1)&PV(0.1,1,-2)&52000)PV(0.1,1,-58000)PV(0.1,1,-16000)) PV(0.1,5,-73000)-(PV(0.1,4,-1)&PV(0.1,1,-1)&52000)PV(0.1,1,-58000)16000)) NPV(0.1,5,-73000)-(((PV(0.1,4,-1)&PV(0.1,2,-1)&52000)PV(0.1,1,-58000)16000))

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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