ny is considering the acquisition of an automatic 3D printer machine for it assemble operation of production line. The project investment of RM35,000 will produce a uniform annual revenue of RM5,310 for seven years and then have a market (salvage) value of RM6,000. Expenses will be RM3,100 in second years and RM2,000 in third years. One-off revenue of RM4, 000 in fifth years will give additional profit to the company. The company is willing to accept any project that will earn 10% per year or more before incomes taxes, on all invested capital. Evaluate whether this project is desirable investment by using the

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
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The JessT Company is considering the acquisition of an automatic 3D printer machine for it assemble operation of production line. The project investment of RM35,000 will produce a uniform annual revenue of RM5,310 for seven years and then have a market (salvage) value of RM6,000. Expenses will be RM3,100 in second years and RM2,000 in third years. One-off revenue of RM4, 000 in fifth years will give additional profit to the company. The company is willing to accept any project that will earn 10% per year or more before incomes taxes, on all invested capital. Evaluate whether this project is desirable investment by using the Annual Worth method.
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