Merrill Productions Is Considering the Purchase of a New Movie

question 50

Essay

Merrill Productions is considering the purchase of a new movie camera,which will be used for major motion pictures.The new camera will cost $30,000,have an eight-year life,and create cost savings of $5,000 per year.The new camera will require $700 of maintenance each year.Merrill Productions uses a discount rate of 9 percent.
Present value tables or a financial calculator are required.
a. Compute the net present value of the new camera
b. Determine the payback period.

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Definitions:

Dominance Structuring

The psychological process through which humans achieve confidence in their decisions. The four phases of dominance structuring are pre-editing, identifying one promising option, testing that promising option for dominance, and structuring the dominance of the option selected.

Psychological Process

Pertains to the cognitive, emotional, and behavioral functions and activities of the mind.

Dominance Structuring

The organization or arrangement of elements in a group or system based on a hierarchy of power, importance, or influence.