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Unformatted text preview: St. Hubbins should change to the arrangement offered by First Booneville. The cost that would make the company indifferent between the two systems would be the cost for the ACH that would make the NPV = 0. Therefore, the following calculation is used to find the cost at which NPV = 0. 0 = 1,190.40 – X X = 1,190.40 At this cost the company will see the same results with either system. Therefore, the two systems are indifferent financially....
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This note was uploaded on 03/28/2010 for the course BUS 011823 taught by Professor Smith during the Spring '10 term at ITT Tech Flint.
- Spring '10