Barker Production Company Is Considering the Purchase of a Flexible

question 79

Essay

Barker Production Company is considering the purchase of a flexible manufacturing system. The after-tax cash benefits/savings associated with the system are as follows:
The system will cost £750,000 and will last ten years. The company's cost of capital is 10 percent.
Required:

a.
What is the payback period for the flexible manufacturing system?
b.
What is the NPV for the flexible manufacturing system?
c.
What is the IRR for the flexible manufacturing system?

---

Definitions:

Laboratory Conditions Doctrine

A legal principle in labor law requiring that union representation elections be conducted in an environment that is free from employer coercion and interference.

Representation Election

This is a procedure where employees vote on whether or not they wish for union representation, sometimes leading to the establishment of a new union presence.

Unionization

The process by which workers form or join a labor union to collectively negotiate with their employer for improved conditions, wages, and benefits.

Salting

A tactic used by unions where union workers get hired at non-union workplaces in order to organize and unionize the employees within.