Bailey inc is considering buying a new gang punch that, Ask an Expert

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Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $60,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $2,500 using the gang punch, but annual raw material costs would decrease $14,000. MARR is 4.0 %/year.

What is the present worth of this investment?

What is the decision rule for judging the attractiveness of investments based on present worth?

Should Bailey buy the gang punch?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91261075

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