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A company is considering spending $690000 on a machine, which will produce labour savings. The first saving will be 1 year from now and will continue for 10 years. The company expects: - inflation in wage rates to be 10% p.a - its nominal cost of capital is 20%. What must the annual savings in labour costs be (in current price terms) for the project to be worthwhile? (use discount factors to three decimal places) The annual saving must be at least: $________. |