Just need 1 question answered with work shown.
An automobile manufacturer is converting an assembly line from standard vehicles to hybrid vehicle production. Conversion will cost $100 million. Production capacity will be 4000 vehicles in the first year and will increase by 1000 vehicles per year for all future years. Each hybrid earns a net profit of $5,000.
a. If the interest rate is 15%, how many years will it take until the present worth of the net benefits equals the $100 million initial cost? Report your answer to 2 decimal places. (2 points)
b. Using the simple payback method, how many years will it take the $100 million investment to pay back? Report your answer to 2 decimal places. (2 points)
c. Based on your answers to parts a. and b. would you recommend this investment? Why or why not? (2 points)
Intresting your question is related to COST Accounting,and CGS and CPR.
It is not difficult this can be solved in simple Journal, if you want other question like this let me know.
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