CrimsonCompany Is Considering the Purchase of a Computerized Manufacturing System

question 30

Multiple Choice

CrimsonCompany is considering the purchase of a computerized manufacturing system. The after-tax cash benefits/savings associated with the system are as follows: $$\begin{array} { l r } \text { Decreased waste } & \$ 150,000 \\\text { Increased quality } & 450,000 \\\text { Decrease in operating costs } & 300,000 \\\text { Increase in on-time deliveries } & 100,000\end{array}$$ The system will cost $10,000,000 and will last eleven years. The company's cost of capital is 9 percent. What is the payback period for the computerized manufacturing system?

• A)10.00 years
• B)12.00 years
• C)9.00 years
• D)20.00 years

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Definitions:

Creative Intelligence

The ability to produce novel and valuable ideas or solve problems in innovative ways.

Practical Intelligence

Refers to the ability to solve everyday problems through skilled reasoning that relies on tacit knowledge.

Predictors

Variables or factors that can be used to forecast future events or outcomes based on past or current data.

Cultural Influence

The impact that the beliefs, values, and practices of a culture have on the behavior and attitudes of individuals within that culture.