(Memorandum Required) Simon Enterprises Is Considering the Purchase of a Flexible Manufacturing

question 75

Essay

(Memorandum required)
Simon Enterprises is considering the purchase of a flexible manufacturing system. The savings associated with the system are estimated to be as follows:
The system will cost £400,000 and will last ten years. The system would have a salvage value of £30,000 at the end of ten years. The company's cost of capital is 8 percent.
Required:
Prepare a memorandum to management with your recommendation regarding whether Simon Enterprises should purchase the flexible manufacturing system. Include a discussion of qualitative factors that might influence management's decision. Include your supporting calculations (including NPV analysis.)

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Definitions:

Integer Array

An array data structure that holds multiple values of integer type, with each element accessible by its index.

Bytes

A unit of digital information storage that typically consists of eight bits, representing a single character of text.

Grade

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Address Operator

In programming, it is a unary operator (often denoted by &) that gives the address in memory of its operand.