Touche Manufacturing Is Considering a Rearrangement of Its Manufacturing Operations

question 56

Essay

Touche Manufacturing is considering a rearrangement of its manufacturing operations.A consultant estimates that the rearrangement should result in after-tax cash savings of $6,000 the first year,$10,000 for the next two years,and $12,000 for the next two years.Interest is at 12%.Assume cash flows occur at the end of the year.
Required: Calculate the total present value of the cash flows.

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Definitions:

Units

Standard quantities used to specify measurements.

Quadrants

The four regions of a Cartesian plane divided by the x-axis and y-axis.

Rectangular Coordinate

A system of specifying points on a plane using two distances, typically known as the x and y coordinates, which define the position relative to two perpendicular axes.

Square

To multiply a number by itself, or a geometric figure with four equal sides and four right angles.