Using data from the Anthonys Orchards website draft a memo t

Using data from the Anthony\'s Orchards website, draft a memo to the chief financial officer (CFO) of the company defending whether the company should or should not purchase an apple press to make apple juice for Anthony\'s Orchards fruit production facility. Does it make sense to add this piece of equipment now or postpone the purchase? As part of your response, calculate the ROI/ARR (accounting rate of return), payback, and IRR methods. Also, determine which method is most appropriate for making this decision and defend your choice. Below is the link for Anthony\'s Orchard.

http://mym.cdn.laureate-media.com/2dett4d/Walden/ACCT/6130/mm/Anthonys_Orchard_Website-PDF%20format.pdf

Solution

Not able to get the data for calculations. IRR is the Internal rate of return which is calculated based on the data pertaining to net cash flows ( cash inflow - cash outflow ) for the periodic future time segments, say per annum, is the rate at which cash outflows ( mostly in present or near future ) matches with cash inflows in future (life time of the project)

Pay back period is the time to recover the investment expenditure. Normally rate of return is preferred over the pay back period.