Phoxco Is Considering Automating Its Production Line at a Cost

question 2

Multiple Choice

Phoxco is considering automating its production line at a cost of $40,000 to acquire the necessary equipment. The annual cost savings are expected to be $8,000 for 14 years. The firm requires a 20% rate of return. Ignore income taxes.
The net present value for this investment is:

• A) Positive
• B) Zero
• C) Negative
• D) Cannot be determined

---

Definitions:

Fluid Volume Excess

A medical condition where there is too much fluid in the body, often leading to swelling and health complications.

Low Sodium

A diet or dietary strategy focusing on the reduction of sodium intake to promote heart health and prevent hypertension.

Respiratory Alkalosis

A medical condition characterized by a decrease in the partial pressure of carbon dioxide in the blood, leading to increased blood pH.

Carbon Dioxide

A transparent, scentless gas created through the combustion of carbon and organic substances, as well as through breathing. It exists naturally in the atmosphere and is taken in by plants during the process of photosynthesis.