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Ruston Ironworks Ruston Ironworks is considering a proposal to sell an existing lathe and purchase a new computeroperated lathe

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Ruston Ironworks

Ruston Ironworks is considering a proposal to sell an existing lathe and purchase a new computeroperated lathe. Information on the existing lathe and the computer-operated lathe follow:

1. Refer to Ruston Ironworks. What is the payback period for the computer-operated lathe?

 a.              1.87  years

1. 1. 2. 2.00  years
      3. 3.53  years
      4. 3.29  years
2. Refer to Ruston Ironworks. If the company uses 10 percent as its discount rate, what is the net present value of the proposed new lathe purchase? Present value tables or a financial calculator are required.
   1. 1. $236,465
      2. $256,465
      3. $195,485
      4. $30,422