Highways, Inc

question 67

Essay

Highways, Inc. is trying to decide whether to purchase a new pavement melting machine, purchase a new mobile cement mixer or to computerize its entire estimating, ordering and inventory system. All of the alternatives are viewed as having the same ten year project life and none are expected to have any salvage value. However, different project prices are applicable to each and each has a different expected stream of annual net cash inflows. The firm's managers believe that a discount rate of 9 percent is appropriate for evaluating the alternatives. Data are as follows:

After examining the project prices, management finds it has sufficient capital budget to complete two of them. Assuming that the cash inflows from the project are independent of one another, which two projects should be undertaken?

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Definitions:

Leadership Status

A position or rank in an organization that signifies authority, often associated with the ability to guide, influence, or command others.

Leadership Success

The effective accomplishment of desired goals and objectives through the direction, influence, and guidance of others.

Task Structure

The degree to which job roles are defined, including the clarity of tasks, procedures, and goals.

Highly Defined

Clearly outlined or specified with detailed characteristics or features.