Homework Answers
Total Investment of Printing Press Machine - 250,000
| Future Worth (FW) | MARR @18% of 250,000 | ERR @15% of 250,000 | Year | |
| 20,000 | 45,000 | 37,500 | 1 | |
| 20,000 | 45,000 | 37,500 | 2 | |
| 20,000 | 45,000 | 37,500 | 3 | |
| 35,000 | 45,000 | 37,500 | 4 | |
| 35,000 | 45,000 | 37,500 | 5 | |
| 35,000 | 45,000 | 37,500 | 6 | |
| 35,000 | 45,000 | 37,500 | 7 | |
| (10,000) | 45,000 | 37,500 | 8 | |
| (10,000) | 45,000 | 37,500 | 9 | |
| 180,000 |
|
337,500 | Total | |
Since Future Worth (FW) of this Investment is Less than Minimum acceptable rate of return (MARR) and External rate of return (ERR) This Investment should not be accepted.
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Park Printers operates a printing press with a monthly
capacity of 3,200 machine-hours. Park has two main customers: Scott
Corporation and Margaret Corporation. Data in each customer for
Januray are:
Margaret Corporation indicates that it wants Park to
do an additional $112,000 worth if printing jobs during February.
These jobs are identical to the existing business Park did for
Maragret in January in terms of variable costs and machine-hours
required. Patk anticipates that the business from Scott Corporation
in February...
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USE
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