[Solved]1 Smart Manufacturing Company Planning Reduce Labor Costs Automating Critical Task Current Q37260956

1. Smart Manufacturing Company is planning to reduce its labor costs by automating a critical task that is currently performed manually. The automation requires the installation of a new machine. The cost to purchase and install a new machine is $10,000. The installation of machine can reduce annual labor cost by $3,200. The life of the machine is 4 years. The salvage value of the machine after fifteen years will be zero. The required rate of return of Smart Manufacturing Company is 5%.

2. A project requires an initial investment of $235,000 and is expected to generate the following net cash inflows:

• Year 1: $67,000
• Year 2: $64,000
• Year 3: $50,000
• Year 4: $45,000

Required: Compute net present value of the project if the minimum desired rate of return is 10%.

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Answer to 1. Smart Manufacturing Company is planning to reduce its labor costs by automating a critical task that is currently per… . . .