Bellamy Company Is Considering the Purchase of a Computerized Manufacturing

question 83

Multiple Choice

Bellamy Company is considering the purchase of a computerized manufacturing system. The after-tax cash benefits/savings associated with the system are as follows: The system will cost $9,000,000 and will last ten years. The company's cost of capital is 12 percent.
What is the NPV for the computerized manufacturing system?

• A) ($525,000)
• B) ($5,610,000)
• C) $8,475,000
• D) $9,000,000

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Definitions:

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