SlideShare a Scribd company logo
1 of 2
Download to read offline
(1) The following table summarizes information which are associated with three new 3D Printers
being considered for use in a manufacturing plant. Note that M&O stands for Maintenance &
Operation Cost.
The company's interest rate (MARR) is 12%. Which 3D Printer should the company choose?
Use Annual Cash Flow Analysis.
Solution
NOTES:
(1) M&O is an annual cost.
(2) M&O Gradient: The M&O gradient is 0 at the end of year 1 & increase by the value of
gradient every year. For example, for Printer 1, M&O = $78,000 for year-1. Then, M&O for
year-2 = $78,000 + $15,000 = $93,000. M&O for year-3 = $93,000 + $15,000 = $108,000, and
so on.
(3) Depreciation being a non-cash expense, would be excluded from the annual cash flow
considerations.
Company will choose that printer for which the NPV (Sum of present values of all cash inflows
& outflows) is highest.
The calculations & results are as follows.
From above results, we see that NPV of the 1st Printer is highest, at $619,248. So the company
will choose printer 1.Printer 1YearInvestmentAnnual BenefitAnnual M&OSalvage ValueNet
Annual Cash InflowDiscount Factor @12%Discounted Cash Flow (Present Value)0-27,80,000-
27,80,0001.0000-
27,80,00016,70,00078,0005,92,0000.89295,28,57126,70,00093,0005,77,0000.79724,59,98136,7
0,0001,08,0005,62,0000.71184,00,02046,70,0001,23,0005,47,0000.63553,47,62856,70,0001,38,
0005,32,0000.56743,01,87166,70,0001,53,0005,17,0000.50662,61,92876,70,0001,68,0005,02,0
000.45232,27,07986,70,0001,83,0004,87,0000.40391,96,69196,70,0001,98,0004,72,0000.36061
,70,208106,70,0002,13,0004,57,0000.32201,47,142116,70,0002,28,0004,42,0000.28751,27,064
126,70,0002,43,0004,27,0000.25671,09,600136,70,0002,58,0004,12,0000.229294,420131,18,00
01,18,0000.229227,043NPV6,19,248Printer 2YearInvestmentAnnual BenefitAnnual
M&OSalvage ValueNet Annual Cash InflowDiscount Factor @12%Discounted Cash Flow
(Present Value)0-26,30,000-26,30,0001.0000-
26,30,00016,50,00071,0005,79,0000.89295,16,96426,50,00083,5005,66,5000.79724,51,61036,5
0,00096,0005,54,0000.71183,94,32646,50,0001,08,5005,41,5000.63553,44,13356,50,0001,21,0
005,29,0000.56743,00,16966,50,0001,33,5005,16,5000.50662,61,67576,50,0001,46,0005,04,00
00.45232,27,98486,50,0001,58,5004,91,5000.40391,98,50996,50,0001,71,0004,79,0000.36061,
72,732106,50,0001,83,5004,66,5000.32201,50,201116,50,0001,96,0004,54,0000.28751,30,5141
197,00097,0000.287527,885NPV5,46,702Printer 3YearInvestmentAnnual BenefitAnnual
M&OSalvage ValueNet Annual Cash InflowDiscount Factor @12%Discounted Cash Flow
(Present Value)0-23,00,000-23,00,0001.0000-
23,00,00015,80,00065,0005,15,0000.89294,59,82125,80,00076,0005,04,0000.79724,01,78635,8
0,00087,0004,93,0000.71183,50,90845,80,00098,0004,82,0000.63553,06,32055,80,0001,09,000
4,71,0000.56742,67,25865,80,0001,20,0004,60,0000.50662,33,05075,80,0001,31,0004,49,0000.
45232,03,10585,80,0001,42,0004,38,0000.40391,76,90195,80,0001,53,0004,27,0000.36061,53,
980982,00082,0000.360629,570NPV2,82,699

More Related Content

Similar to (1) The following table summarizes information which are associated .pdf

Net Present Value & Internal Rate of Return
Net Present Value & Internal Rate of ReturnNet Present Value & Internal Rate of Return
Net Present Value & Internal Rate of ReturnAgung Kurniawan
 
CFO Brochure
CFO BrochureCFO Brochure
CFO BrochureBo Jurney
 
Print Vision Presentation (August 2008)
Print Vision Presentation (August 2008)Print Vision Presentation (August 2008)
Print Vision Presentation (August 2008)Jon Hansen
 
Topic 2 Cf And Making Investment Decisions
Topic 2 Cf And Making Investment DecisionsTopic 2 Cf And Making Investment Decisions
Topic 2 Cf And Making Investment Decisionsshengvn
 
Choosing innovation projects
Choosing innovation projectsChoosing innovation projects
Choosing innovation projectsMuhammadRozaq3
 
Telecom Strategy
Telecom StrategyTelecom Strategy
Telecom StrategyLou Khalil
 
8 150316005531-conversion-gate01
8 150316005531-conversion-gate018 150316005531-conversion-gate01
8 150316005531-conversion-gate01abidiqbal55
 
8. Rate of return analysis
8. Rate of return analysis8. Rate of return analysis
8. Rate of return analysisMohsin Siddique
 
Optimized Print Services White Paper - A Guide to Greater Savings
Optimized Print Services White Paper - A Guide to Greater SavingsOptimized Print Services White Paper - A Guide to Greater Savings
Optimized Print Services White Paper - A Guide to Greater SavingsAdrian Boucek
 
Optimize Print Services White Paper - A Guide to Greater Savings
Optimize Print Services White Paper - A Guide to Greater SavingsOptimize Print Services White Paper - A Guide to Greater Savings
Optimize Print Services White Paper - A Guide to Greater SavingsLarry Levine
 
Nmims cost-management-accounting
Nmims   cost-management-accountingNmims   cost-management-accounting
Nmims cost-management-accountingsmumbahelp
 
Statistical Process ControlAgendaIntroductionNumber of.docx
Statistical Process ControlAgendaIntroductionNumber of.docxStatistical Process ControlAgendaIntroductionNumber of.docx
Statistical Process ControlAgendaIntroductionNumber of.docxsusanschei
 
Project 1 t-shirt business model
Project 1 t-shirt business modelProject 1 t-shirt business model
Project 1 t-shirt business modelParth Shah
 
Advanced Management Accounting Paper for IPCC
Advanced Management Accounting Paper for IPCCAdvanced Management Accounting Paper for IPCC
Advanced Management Accounting Paper for IPCCseomiamia
 
List of programs to practice for ICSE
List of programs to practice for ICSEList of programs to practice for ICSE
List of programs to practice for ICSEMokshya Priyadarshee
 
Risk and financial portfolio analytics - A technical Introduction
Risk and financial portfolio analytics - A technical IntroductionRisk and financial portfolio analytics - A technical Introduction
Risk and financial portfolio analytics - A technical IntroductionRaul Chong
 

Similar to (1) The following table summarizes information which are associated .pdf (18)

Net Present Value & Internal Rate of Return
Net Present Value & Internal Rate of ReturnNet Present Value & Internal Rate of Return
Net Present Value & Internal Rate of Return
 
CFO Brochure
CFO BrochureCFO Brochure
CFO Brochure
 
Print Vision Presentation (August 2008)
Print Vision Presentation (August 2008)Print Vision Presentation (August 2008)
Print Vision Presentation (August 2008)
 
saving_concepts
saving_conceptssaving_concepts
saving_concepts
 
Topic 2 Cf And Making Investment Decisions
Topic 2 Cf And Making Investment DecisionsTopic 2 Cf And Making Investment Decisions
Topic 2 Cf And Making Investment Decisions
 
Choosing innovation projects
Choosing innovation projectsChoosing innovation projects
Choosing innovation projects
 
Telecom Strategy
Telecom StrategyTelecom Strategy
Telecom Strategy
 
8 150316005531-conversion-gate01
8 150316005531-conversion-gate018 150316005531-conversion-gate01
8 150316005531-conversion-gate01
 
8. Rate of return analysis
8. Rate of return analysis8. Rate of return analysis
8. Rate of return analysis
 
Optimized Print Services White Paper - A Guide to Greater Savings
Optimized Print Services White Paper - A Guide to Greater SavingsOptimized Print Services White Paper - A Guide to Greater Savings
Optimized Print Services White Paper - A Guide to Greater Savings
 
Optimize Print Services White Paper - A Guide to Greater Savings
Optimize Print Services White Paper - A Guide to Greater SavingsOptimize Print Services White Paper - A Guide to Greater Savings
Optimize Print Services White Paper - A Guide to Greater Savings
 
Nmims cost-management-accounting
Nmims   cost-management-accountingNmims   cost-management-accounting
Nmims cost-management-accounting
 
Statistical Process ControlAgendaIntroductionNumber of.docx
Statistical Process ControlAgendaIntroductionNumber of.docxStatistical Process ControlAgendaIntroductionNumber of.docx
Statistical Process ControlAgendaIntroductionNumber of.docx
 
Project 1 t-shirt business model
Project 1 t-shirt business modelProject 1 t-shirt business model
Project 1 t-shirt business model
 
Advanced Management Accounting Paper for IPCC
Advanced Management Accounting Paper for IPCCAdvanced Management Accounting Paper for IPCC
Advanced Management Accounting Paper for IPCC
 
List of programs to practice for ICSE
List of programs to practice for ICSEList of programs to practice for ICSE
List of programs to practice for ICSE
 
Ch10
Ch10Ch10
Ch10
 
Risk and financial portfolio analytics - A technical Introduction
Risk and financial portfolio analytics - A technical IntroductionRisk and financial portfolio analytics - A technical Introduction
Risk and financial portfolio analytics - A technical Introduction
 

More from jinnah3

(1) What are some advantages and disadvantages to checking all order.pdf
(1) What are some advantages and disadvantages to checking all order.pdf(1) What are some advantages and disadvantages to checking all order.pdf
(1) What are some advantages and disadvantages to checking all order.pdfjinnah3
 
#44REQUIREDA. explain the operational and behavioral benefits th.pdf
#44REQUIREDA. explain the operational and behavioral benefits th.pdf#44REQUIREDA. explain the operational and behavioral benefits th.pdf
#44REQUIREDA. explain the operational and behavioral benefits th.pdfjinnah3
 
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdfjinnah3
 
[Related to the Making the Connection] Economist Charles Kenny of the.pdf
 [Related to the Making the Connection] Economist Charles Kenny of the.pdf [Related to the Making the Connection] Economist Charles Kenny of the.pdf
[Related to the Making the Connection] Economist Charles Kenny of the.pdfjinnah3
 
                 Briefly state some of the observations Peter Schol.pdf
                  Briefly state some of the observations Peter Schol.pdf                  Briefly state some of the observations Peter Schol.pdf
                 Briefly state some of the observations Peter Schol.pdfjinnah3
 
Youd like to estimate the proportion of the 31,802 students at NC.pdf
 Youd like to estimate the proportion of the 31,802 students at NC.pdf Youd like to estimate the proportion of the 31,802 students at NC.pdf
Youd like to estimate the proportion of the 31,802 students at NC.pdfjinnah3
 

More from jinnah3 (6)

(1) What are some advantages and disadvantages to checking all order.pdf
(1) What are some advantages and disadvantages to checking all order.pdf(1) What are some advantages and disadvantages to checking all order.pdf
(1) What are some advantages and disadvantages to checking all order.pdf
 
#44REQUIREDA. explain the operational and behavioral benefits th.pdf
#44REQUIREDA. explain the operational and behavioral benefits th.pdf#44REQUIREDA. explain the operational and behavioral benefits th.pdf
#44REQUIREDA. explain the operational and behavioral benefits th.pdf
 
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf
#21In the economy of UNAM in 1968 exports were $45, GDP was $570, .pdf
 
[Related to the Making the Connection] Economist Charles Kenny of the.pdf
 [Related to the Making the Connection] Economist Charles Kenny of the.pdf [Related to the Making the Connection] Economist Charles Kenny of the.pdf
[Related to the Making the Connection] Economist Charles Kenny of the.pdf
 
                 Briefly state some of the observations Peter Schol.pdf
                  Briefly state some of the observations Peter Schol.pdf                  Briefly state some of the observations Peter Schol.pdf
                 Briefly state some of the observations Peter Schol.pdf
 
Youd like to estimate the proportion of the 31,802 students at NC.pdf
 Youd like to estimate the proportion of the 31,802 students at NC.pdf Youd like to estimate the proportion of the 31,802 students at NC.pdf
Youd like to estimate the proportion of the 31,802 students at NC.pdf
 

Recently uploaded

Accessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impactAccessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impactdawncurless
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptxVS Mahajan Coaching Centre
 
_Math 4-Q4 Week 5.pptx Steps in Collecting Data
_Math 4-Q4 Week 5.pptx Steps in Collecting Data_Math 4-Q4 Week 5.pptx Steps in Collecting Data
_Math 4-Q4 Week 5.pptx Steps in Collecting DataJhengPantaleon
 
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxPOINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxSayali Powar
 
Presiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsPresiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsanshu789521
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxiammrhaywood
 
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17Incoming and Outgoing Shipments in 1 STEP Using Odoo 17
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17Celine George
 
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdf
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdfEnzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdf
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdfSumit Tiwari
 
Class 11 Legal Studies Ch-1 Concept of State .pdf
Class 11 Legal Studies Ch-1 Concept of State .pdfClass 11 Legal Studies Ch-1 Concept of State .pdf
Class 11 Legal Studies Ch-1 Concept of State .pdfakmcokerachita
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docxPoojaSen20
 
Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentInMediaRes1
 
Interactive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationInteractive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationnomboosow
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesFatimaKhan178732
 
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Sapana Sha
 
Employee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxEmployee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxNirmalaLoungPoorunde1
 
Introduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher EducationIntroduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher Educationpboyjonauth
 
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...Marc Dusseiller Dusjagr
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformChameera Dedduwage
 
Mastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionMastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionSafetyChain Software
 
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️9953056974 Low Rate Call Girls In Saket, Delhi NCR
 

Recently uploaded (20)

Accessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impactAccessible design: Minimum effort, maximum impact
Accessible design: Minimum effort, maximum impact
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
 
_Math 4-Q4 Week 5.pptx Steps in Collecting Data
_Math 4-Q4 Week 5.pptx Steps in Collecting Data_Math 4-Q4 Week 5.pptx Steps in Collecting Data
_Math 4-Q4 Week 5.pptx Steps in Collecting Data
 
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptxPOINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
POINT- BIOCHEMISTRY SEM 2 ENZYMES UNIT 5.pptx
 
Presiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsPresiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha elections
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
 
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17Incoming and Outgoing Shipments in 1 STEP Using Odoo 17
Incoming and Outgoing Shipments in 1 STEP Using Odoo 17
 
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdf
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdfEnzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdf
Enzyme, Pharmaceutical Aids, Miscellaneous Last Part of Chapter no 5th.pdf
 
Class 11 Legal Studies Ch-1 Concept of State .pdf
Class 11 Legal Studies Ch-1 Concept of State .pdfClass 11 Legal Studies Ch-1 Concept of State .pdf
Class 11 Legal Studies Ch-1 Concept of State .pdf
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docx
 
Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media Component
 
Interactive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communicationInteractive Powerpoint_How to Master effective communication
Interactive Powerpoint_How to Master effective communication
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and Actinides
 
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111Call Girls in Dwarka Mor Delhi Contact Us 9654467111
Call Girls in Dwarka Mor Delhi Contact Us 9654467111
 
Employee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptxEmployee wellbeing at the workplace.pptx
Employee wellbeing at the workplace.pptx
 
Introduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher EducationIntroduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher Education
 
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...
“Oh GOSH! Reflecting on Hackteria's Collaborative Practices in a Global Do-It...
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy Reform
 
Mastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory InspectionMastering the Unannounced Regulatory Inspection
Mastering the Unannounced Regulatory Inspection
 
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
 

(1) The following table summarizes information which are associated .pdf

  • 1. (1) The following table summarizes information which are associated with three new 3D Printers being considered for use in a manufacturing plant. Note that M&O stands for Maintenance & Operation Cost. The company's interest rate (MARR) is 12%. Which 3D Printer should the company choose? Use Annual Cash Flow Analysis. Solution NOTES: (1) M&O is an annual cost. (2) M&O Gradient: The M&O gradient is 0 at the end of year 1 & increase by the value of gradient every year. For example, for Printer 1, M&O = $78,000 for year-1. Then, M&O for year-2 = $78,000 + $15,000 = $93,000. M&O for year-3 = $93,000 + $15,000 = $108,000, and so on. (3) Depreciation being a non-cash expense, would be excluded from the annual cash flow considerations. Company will choose that printer for which the NPV (Sum of present values of all cash inflows & outflows) is highest. The calculations & results are as follows. From above results, we see that NPV of the 1st Printer is highest, at $619,248. So the company will choose printer 1.Printer 1YearInvestmentAnnual BenefitAnnual M&OSalvage ValueNet Annual Cash InflowDiscount Factor @12%Discounted Cash Flow (Present Value)0-27,80,000- 27,80,0001.0000- 27,80,00016,70,00078,0005,92,0000.89295,28,57126,70,00093,0005,77,0000.79724,59,98136,7 0,0001,08,0005,62,0000.71184,00,02046,70,0001,23,0005,47,0000.63553,47,62856,70,0001,38, 0005,32,0000.56743,01,87166,70,0001,53,0005,17,0000.50662,61,92876,70,0001,68,0005,02,0 000.45232,27,07986,70,0001,83,0004,87,0000.40391,96,69196,70,0001,98,0004,72,0000.36061 ,70,208106,70,0002,13,0004,57,0000.32201,47,142116,70,0002,28,0004,42,0000.28751,27,064 126,70,0002,43,0004,27,0000.25671,09,600136,70,0002,58,0004,12,0000.229294,420131,18,00 01,18,0000.229227,043NPV6,19,248Printer 2YearInvestmentAnnual BenefitAnnual M&OSalvage ValueNet Annual Cash InflowDiscount Factor @12%Discounted Cash Flow (Present Value)0-26,30,000-26,30,0001.0000- 26,30,00016,50,00071,0005,79,0000.89295,16,96426,50,00083,5005,66,5000.79724,51,61036,5 0,00096,0005,54,0000.71183,94,32646,50,0001,08,5005,41,5000.63553,44,13356,50,0001,21,0 005,29,0000.56743,00,16966,50,0001,33,5005,16,5000.50662,61,67576,50,0001,46,0005,04,00
  • 2. 00.45232,27,98486,50,0001,58,5004,91,5000.40391,98,50996,50,0001,71,0004,79,0000.36061, 72,732106,50,0001,83,5004,66,5000.32201,50,201116,50,0001,96,0004,54,0000.28751,30,5141 197,00097,0000.287527,885NPV5,46,702Printer 3YearInvestmentAnnual BenefitAnnual M&OSalvage ValueNet Annual Cash InflowDiscount Factor @12%Discounted Cash Flow (Present Value)0-23,00,000-23,00,0001.0000- 23,00,00015,80,00065,0005,15,0000.89294,59,82125,80,00076,0005,04,0000.79724,01,78635,8 0,00087,0004,93,0000.71183,50,90845,80,00098,0004,82,0000.63553,06,32055,80,0001,09,000 4,71,0000.56742,67,25865,80,0001,20,0004,60,0000.50662,33,05075,80,0001,31,0004,49,0000. 45232,03,10585,80,0001,42,0004,38,0000.40391,76,90195,80,0001,53,0004,27,0000.36061,53, 980982,00082,0000.360629,570NPV2,82,699