1 | |||||||
Reduction in labor costs | 111000 | ||||||
Reduction in material waste | 7200 | ||||||
Total | 118200 | ||||||
Less increased maintenance costs | 44400 | ||||||
Annual net cost savings | 73800 | ||||||
2a | |||||||
Now | 1 | 2 | 3 | 4 | 5 | 6 | |
Cost of machine | -285000 | ||||||
Software and installation | -81000 | ||||||
Salvage value of old equipment | 15500 | ||||||
Annual net cost savings | 73800 | 73800 | 73800 | 73800 | 73800 | 73800 | |
Replacement of parts | -44000 | ||||||
Salvage value of new machine | 27000 | ||||||
Total cash flows | -350500 | 73800 | 73800 | 29800 | 73800 | 73800 | 100800 |
Discount factor (14%) | 1 | 0.877 | 0.769 | 0.675 | 0.592 | 0.519 | 0.456 |
Present value | -350500 | 64723 | 56752 | 20115 | 43690 | 38302 | 45965 |
Net present value | -80954 | ||||||
2b | |||||||
NO, as Net Present value is negative | |||||||
3 | |||||||
Negative Net present value to offset | 80954 | ||||||
Divide by PV factor | 3.889 | =(1-(1.14)^-6)/0.14 | |||||
Annual intangible benefits | 20816 | or 20822 |
"I'm not sure we should lay out $285,000 for that automated welding machine," said Jim Alder,...
I'm not sure we should lay out $280,000 for that automated welding machine." said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $80,000 for software and installation, and another $43,200 per year just to maintain the thing. In addition, the manufacturer admits it would cost $43,000 more at the end of three years to replace worn out parts. admit it's a lot of money." said Franci Rogers, the controller. "But...
"I'm not sure we should lay out $285,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $81,000 for software and installation, and another $3,700 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $44,000 more at the end of three years to replace worn-out parts." 1 admit it's a lot of money," said Franci Rogers, the controller....
“I’m not sure we should lay out $365,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $97,000 for software and installation, and another $5,300 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $60,000 more at the end of three years to replace worn-out parts.” “I admit it’s a lot of money,” said Franci Rogers, the...
“I’m not sure we should lay out $365,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $97,000 for software and installation, and another $5,300 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $60,000 more at the end of three years to replace worn-out parts.” “I admit it’s a lot of money,” said Franci Rogers, the...
“I’m not sure we should lay out $305,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $85,000 for software and installation, and another $49,200 per year just to maintain the thing. In addition, the manufacturer admits it would cost $48,000 more at the end of three years to replace worn-out parts.” “I admit it’s a lot of money,” said Franci Rogers, the controller. “But...
“I’m not sure we should lay out $375,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $99,000 for software and installation, and another $5,500 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $62,000 more at the end of three years to replace worn-out parts.” “I admit it’s a lot of money,” said Franci Rogers, the...
“I’m not sure we should lay out $325,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $89,000 for software and installation, and another $4,500 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $52,000 more at the end of three years to replace worn-out parts.” “I admit it’s a lot of money,” said Franci Rogers, the...
Please show work, thank you "I'm not sure we should lay out $310,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us another $50,400 per year just to maintain the thing. In addition, the manufacturer admits it would cost $49,000 more at the end of three years to replace worn-out parts." $86,000 for software and installation, and "I admit it's a lot of money," said...
Net Present Value Analysis; Uncertain Cash Flows“I’m not sure we should lay out $500,000 for that automated welding machine,” said Jim Alder, president of the Superior Equipment Company. “That’s a lot of money, and it would cost us $80,000 for software and installation, and another $3,000 every month just to maintain the thing. In addition, the manufacturer admits that it would cost $45,000 more at the end of seven years to replace worn-out parts.” “I admit it’s a lot of...
"I'm not sure we should lay out $265,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $75,000 for software and installation, and another $37,200 per year just to maintain the thing. In addition, the manufacturer admits it would cost $38,000 more at the end of three years to replace worn-out parts." "I admit it's a lot of money," said Franci Rogers, the controller. "But...