Use the Information Below to Answer the Following Question(s)

question 104

Multiple Choice

Use the information below to answer the following question(s) .Saturn Ltd.wants to automate one of its production processes.The new equipment will cost $180,000.In addition, Saturn will incur installation and testing costs of $5,000 and $8,500 respectively.The expected life of the equipment is 8 years and the salvage value of the equipment is estimated at $18,000.The annual cash savings are estimated at $32,000.The company uses straight-line depreciation and has a required rate of return of 14%.Ignore income taxes.
-What is the payback period for the investment Saturn Ltd.is considering?

• A)5.63 years
• B)5.78 years
• C)6.05 years
• D)5.26 years
• E)The project does not payback.

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Definitions:

Enhance Reputations

The process of improving the public's perception of a person, company, or organization.

Global Presence

The extent to which a company or organization operates and is recognized across different countries and cultures around the world.

Hill & Knowlton

A global public relations company known for its strategic communications and marketing services for brands and corporations.

Starting Point Of CSR

The conceptual origin or initial step in adopting Corporate Social Responsibility, where a company acknowledges its responsibility towards society and the environment beyond profit-making activities.