Lake Torrens Minimarket Desires to Buy a New Coding Machine

question 53

Essay

Lake Torrens Minimarket desires to buy a new coding machine to help control inventories.The machine sells for $73 172 and requires working capital of $8000.Its estimated useful life is five years and will have a salvage value of $8000.Recovery of working capital will be $8000 at the end of its useful life.Annual cash savings from the purchase of the machine will be $20 000.
Required:
a.Compute the net present value at a 14% required rate of return.
b.Compute the internal rate of return.
c.Determine the discounted payback period of the investment.
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Definitions:

Normative Ethics

The branch of ethics concerned with establishing how things should or ought to be, how to value them, which actions are right or wrong, and which traits of character are good or bad.

Applied Ethics

The branch of ethics that deals with the analysis of specific, controversial moral issues such as abortion, animal rights, and euthanasia.

Method Ethics

An approach to ethics that focuses on the procedures or methods used to make moral decisions, rather than on the outcomes of the decisions.

Criminal Justice

The system of practices and institutions aimed at upholding social control, deterring and mitigating crime, and sanctioning those who violate laws with criminal penalties and rehabilitation efforts.