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Create a spreadsheet to compute the NPV and payback period to assist with a purc

ID: 2503771 • Letter: C

Question

Create a spreadsheet to compute the NPV and payback period to assist with a purchase decision. Use to results to answer questions about your findings.

Scenario: Amazon.com is planning to purchase a new bar-coding machine for one of its warehouses. You have been asked to prepare a simple analysis to determine whether Amazon should purchase the machine. The bar coding machine costs $60,000. It has a 5 year economic life and an estimated residual value of $10,000. The estimated annual net cash flow from the machine is $16,000. Amazon.com

Explanation / Answer

Solution to Part (a)<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Thus the machine

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