Ohm Depot Co equipment purchase: PVB, NPV, Payback, Profitability index
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The Ohm Depot Co. is currently considering the purchase of a new machine that would increase the speed of manufacturing electronic equipment and save money. The net cost of the new machine is $66,000. The annual cash flows have the following projections:
Year Amount
1 $21,000
2 $29,000
3 $36,000
4 $16,000
5 $8,000
If the cost of capital is 10%, find the following:
a. The PVB
b. The NPV
c. Payback
d. PI
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Solution Summary
The expert examines OHM Depot Co equipment purchases. The PVB, NPV, payback and profitability index are determined.
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