Homework Answers
a.
NPW of option 1 = -20000 - 1500 * (P/A, 10%,30)
= -20000 - 1500 * 9.426914
= -34140.37
NPW of option 2 = -15000 - 15000 * (P/F, 10%,10) - 1000 * (P/A, 10%,30) - 1000 * (P/A, 10%,20) * (P/F, 10%,10)
= -15000 - 15000 * 0.385543 - 1000 * 9.426914 - 1000 * 8.513564 * 0.385543
= -33492.41
As the present cost of option 2 is less it should be selected
b.
When demand for additional lines occur in 5 yrs
NPW of option 2 = -15000 - 15000 * (P/F, 10%,5) - 1000 * (P/A, 10%,30) - 1000 * (P/A, 10%,25) * (P/F, 10%,5)
= -15000 - 15000 * 0.620921 - 1000 * 9.426914 - 1000 * 9.077040 * 0.620921
= -39376.86
As the present cost of option 1 is less it should be selected in this case
Add Answer to:
5-31 Teléfono Mexico is expanding its facilities to serve a new manufacturing plant. The new plant...
13. A manufacturing company, called "Manufacturing Co", must purchase new equipment for one of its assembly...
13. A manufacturing company, called "Manufacturing Co", must purchase new equipment for one of its assembly lines. Three different options (A, B, and C) are under consideration. Option A, which has an acquisition cost of $110,000, is standard equipment that has already been on the market for a number of years. Options B and C are new equipment recently developed by a new company, called "EquipmentCo". EquipmentCo will offer a reduced price of $75,000 for option B and $25,000 for...
2. A steel bar manufacturing plant is planning to upgrade the production capacity of its plant...
2. A steel bar manufacturing plant is planning to upgrade the production capacity of its plant in Rawang. The upgrading exercise requires a replacement of the current 1,000 ft' heat exchanges to a 2,500 ft' exchanger. The following data were obtained from Senior Operation Engineer of the plant Estimation Labor Cost • Material Costs Labor cost index value was at 124 ten years ago and is 188 today. Annual labor costs for a similar facility were $575,500 ten years ago....
Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The...
Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.69 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $46,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates: • Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.00 million per year in additional...
Pineapple Ltd is considering replacing its current stock of computers with a new model. It plans...
Pineapple Ltd is considering replacing its current stock of
computers with a new model. It plans to evaluate three
options
based on the following information:
Management is considering three options:
1. Replace the old computers now and operate Model XA for four
years, then replace with Model XD and operate for eight
years, to be replaced in perpetuity
2. Replace the old computers now and operate Model XXD for 12
years, to be replaced in perpetuity
3. Replace the old...
A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant has...
A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant has a cost basis of $4000 and a 10-year depreciable life. The estimated SV of the saw is zero at the end of 10 years. Use the DB method to calculate the annual depreciation amount when : a) R=2/N ( 200% DB Method) b) R=1.5/N (150% DB Method) Please use hand calculations with all details.
10) An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away...
10) An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away. A 120 mm pipe is being considered with the following characteristics. What is the benefit-cost ratio for this pipe using an annual interest rate of 10 %? Initial cost $2500 12 Years $300 $300 $1.40 600 hours/year $2000/year Service Life Salvage Value Annual Maintenance Pump Cost/Hour Pump Operation Estimated Benefits a. 1.22 b. 1.34 c. 1.45 d. 2.10
1) Your company, International Widget Manufacturers, is headquartered in New Orleans, but is considering expanding its o...
1) Your company, International Widget Manufacturers, is headquartered in New Orleans, but is considering expanding its operations to the west coast. It will cost $10 million to build a plant in California to make widgets, but if you do, you will be able to sell 1.5 million widgets per year for the next ten years. The project ends at that time. During the first year, your widgets will be priced at $1.00 each. They will cost 30 cents each to...
Garland Chocolates Shanti Suppiah, director of operations at the Garland Chocolates plant in Durham, North Carolina,...
Garland Chocolates Shanti Suppiah, director of operations at the Garland Chocolates plant in Durham, North Carolina, was preparing for a team meeting scheduled for Monday, March 18, to decide what to do about declining margins for the Edgeworth Toffee brand. Options were to invest in new equipment or outsource manufacturing and packing. It was Wednesday, March 12, and Shanti needed to prepare her analysis and develop a recommendation prior to the meeting. Garland Chocolates Headquartered in London, UK, Garland Chocolates...
Please show work Question 3 (25 points A small manufacturing plant needs a new compressor and...
Please show work
Question 3 (25 points A small manufacturing plant needs a new compressor and has received two bids. compressor has an initial cost of $300,000 and will provide a net uniform annual benefit of $72,000. The second compressor has an initial cost of S of $81,000. Both compressors have a useful life of 10 years and no salvage value. If the manufacturing plant has an MARR of 15%, using rate of return analysis a) What is the rate...
Location Section Project A small logistic company named LogTransit currently has 3 manufacturing facilities (suppliers) called...
Location Section Project A small logistic company named LogTransit currently has 3 manufacturing facilities (suppliers) called Supplier #1, #2 and #3 to supply for goods of its 3 retail stores (customers) called Customer A, B, and C. Due to customer demands at stores are increasing, the company is considering to construct a new manufacturing facility. The new factory will have a supply capacity of 200 units per week. After screening many potential sites, Toledo and Cincinnati have been determined to...
13. A manufacturing company, called "Manufacturing Co", must purchase new equipment for one of its assembly lines. Three different options (A, B, and C) are under consideration. Option A, which has an acquisition cost of $110,000, is standard equipment that has already been on the market for a number of years. Options B and C are new equipment recently developed by a new company, called "EquipmentCo". EquipmentCo will offer a reduced price of $75,000 for option B and $25,000 for...
2. A steel bar manufacturing plant is planning to upgrade the production capacity of its plant in Rawang. The upgrading exercise requires a replacement of the current 1,000 ft' heat exchanges to a 2,500 ft' exchanger. The following data were obtained from Senior Operation Engineer of the plant Estimation Labor Cost • Material Costs Labor cost index value was at 124 ten years ago and is 188 today. Annual labor costs for a similar facility were $575,500 ten years ago....
Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.69 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $46,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates: • Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.00 million per year in additional...
Pineapple Ltd is considering replacing its current stock of
computers with a new model. It plans to evaluate three
options
based on the following information:
Management is considering three options:
1. Replace the old computers now and operate Model XA for four
years, then replace with Model XD and operate for eight
years, to be replaced in perpetuity
2. Replace the old computers now and operate Model XXD for 12
years, to be replaced in perpetuity
3. Replace the old...
10) An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away. A 120 mm pipe is being considered with the following characteristics. What is the benefit-cost ratio for this pipe using an annual interest rate of 10 %? Initial cost $2500 12 Years $300 $300 $1.40 600 hours/year $2000/year Service Life Salvage Value Annual Maintenance Pump Cost/Hour Pump Operation Estimated Benefits a. 1.22 b. 1.34 c. 1.45 d. 2.10
Garland Chocolates Shanti Suppiah, director of operations at the Garland Chocolates plant in Durham, North Carolina, was preparing for a team meeting scheduled for Monday, March 18, to decide what to do about declining margins for the Edgeworth Toffee brand. Options were to invest in new equipment or outsource manufacturing and packing. It was Wednesday, March 12, and Shanti needed to prepare her analysis and develop a recommendation prior to the meeting. Garland Chocolates Headquartered in London, UK, Garland Chocolates...
Please show work
Question 3 (25 points A small manufacturing plant needs a new compressor and has received two bids. compressor has an initial cost of $300,000 and will provide a net uniform annual benefit of $72,000. The second compressor has an initial cost of S of $81,000. Both compressors have a useful life of 10 years and no salvage value. If the manufacturing plant has an MARR of 15%, using rate of return analysis a) What is the rate...
Location Section Project A small logistic company named LogTransit currently has 3 manufacturing facilities (suppliers) called Supplier #1, #2 and #3 to supply for goods of its 3 retail stores (customers) called Customer A, B, and C. Due to customer demands at stores are increasing, the company is considering to construct a new manufacturing facility. The new factory will have a supply capacity of 200 units per week. After screening many potential sites, Toledo and Cincinnati have been determined to...
Most questions answered within 3 hours.
-
An aqueous solution of barium hydroxide is
standardized by titration with a 0.196 M solution
of...
asked 35 minutes ago -
accorsing to the data from thw college board, the mean wuantitive
Sat score for s demale...
asked 1 hour ago -
1- What are 5 general characteristics of Botticelli’s
paintings?
2- Describe 5 important traits of Flemish...
asked 3 hours ago -
A golfer claims that his average golf score at the course he
plays regularly is less...
asked 3 hours ago -
On May 1, First Bank perfected a security interest in Debtor’s
inventory. On June 1, Bob...
asked 4 hours ago -
A new kind of typhoid shot is being developed by a medical
research team. The old...
asked 5 hours ago -
Write a chemical equation for these reactions. (Use
the lowest possible whole number coefficients.) Include
states-of-matter...
asked 7 hours ago -
For each of the Z-scores below, determine two probabilities
(show four three decimal places): (1) the...
asked 8 hours ago -
Oxidative phosphorylation is achieved through chemiosmotic
coupling, which turns chemical energy into osmotic potential energy
that...
asked 11 hours ago -
Hollywood Shoes would like to maintain their cash account at a
minimum level of $64,000, but...
asked 11 hours ago -
Proteins CtrA-P, DnaA, and GcrA behave similarly to what
molecule in the Eukaryotic Cell Cycle?
asked 11 hours ago -
TRUE OR FALSE
In case of a competitive tender procedure, in the request for
quotation, the...
asked 11 hours ago