Blanshan Company Is Considering the Purchase of a Computer-Aided Manufacturing

question 46

Multiple Choice

Blanshan Company is considering the purchase of a computer-aided 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 payback period for the computer-aided manufacturing system?

• A) 10.00 years
• B) 15.00 years
• C) 11.25 years
• D) 6.00 years

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Definitions:

Flights

Refers to scheduled air travel trips or could imply the launching or operation of aircraft.

Facility Expenses

Costs associated with operating and maintaining physical buildings or structures used in the production of goods or services.

Spending Variance

The difference between the actual amount spent and the budgeted or expected amount, which can be favorable or unfavorable.

Tenant-Days

A measure used in hospitality and property management to calculate the total number of days that tenants or guests occupy a space over a certain period.