Touche Manufacturing Is Considering a Rearrangement of Its Manufacturing Operations

question 91

Essay

Touche Manufacturing is considering a rearrangement of its manufacturing operations. A consultant estimates that the rearrangement should result in cash savings of $6,000 the first year, $10,000 for the next two years, and $12,000 for the next two years. Interest is at 12%. Assume cash flows occur at the end of the year.
Required: Calculate the total present value of the cash flows.

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Definitions:

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Laws passed by a legislative body that provide the means for governmental agencies or bodies to enact and enforce regulations.

Animal Protection Commission

A governmental or non-governmental organization dedicated to ensuring the welfare and protection of animals, often by enforcing laws and regulations.

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