Grantham FIN307 Final Exam Latest 2023
Grantham Fin307 Final Exam Principles of Finance – Week 8 Final Exam You will have a mixture of problems and essays. For the essays, you should have at least five paragraphs for each essay question. The first five questions refer to the following scenario regarding Ken Allen at Bally Gears. Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of $560,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $400,000 (also in today's dollars) over that same time period. An initial cash investment of $220,000 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $70,000. Show how Ken will apply marginal cost-benefit analysis techniques to determine the following: