A company is looking at purchasing a new Zeiss CMM (precision measurement machine). They believe having this machine will allow them to get a new contract. The machine would cost $525,000. It would allow the manufacturer to produce 250 custom engine block heads per day (350 days per year) at a gross profit of $1.95 each, but the company would have to pay tax of 25% on their profit. Assuming you looked at everything on a yearly basis and that the project would go on for 5 years, what is the rate of return (%) on this project? (round to the nearest tenth of a percent)

A company is looking at purchasing a new Zeiss CMM (precision measurement machine). They believe having this machine will allow them to get a new contract. The machine would cost $525,000. It would allow the manufacturer to produce 250 custom engine block heads per day (350 days per year) at a gross profit of $1.95 each, but the company would have to pay tax of 25% on their profit. Assuming you looked at everything on a yearly basis and that the project would go on for 5 years, what is the rate of return (%) on this project? (round to the nearest tenth of a percent)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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