A sorting machine for a Singapore warehouse
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| Option | Upfront cost (SGD) | Yearly benefit | Life (years) |
|---|---|---|---|
| Sorting machine | 240,000 | SGD 80,000 of net savings a year, no value at the end | 6 |
| Software upgrade | 240,000 | About 15 percent return a year | Not stated |
The prompt
A Singapore logistics company can buy a warehouse sorting machine for SGD 240,000. It would cut costs by SGD 80,000 a year for six years, with no value at the end. The company's cost of capital is 10 percent a year. The table below compares the machine with the other use of the same budget. Is it worth buying?
Interviewer-led: the interviewer shows the two options and asks for payback, then NPV, then the IRR, and then which option to fund.
Practice with a partner
1. Send the interviewer link to a friend. They read the case aloud and hold the answers.
2. You open the candidate view: you see only the prompt, a timer and a notes box.
3. Speak the case out loud. Your partner shares data when you ask, then scores you with the rubric.
Interviewer view
For the person running the case
Candidate view
For the person answering the case
The exhibit
| Option | Upfront cost (SGD) | Yearly benefit | Life (years) |
|---|---|---|---|
| Sorting machine | 240,000 | SGD 80,000 of net savings a year, no value at the end | 6 |
| Software upgrade | 240,000 | About 15 percent return a year | Not stated |
My notes on this case
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