Question

Cupid's Confections is interested in buying a new manufacturing system to help the company keep up with demand. The company has received bids for two different systems: First Cost Salvage Value Mighty Delighty Candylicious $95,435 $108,805 $17,493 $25,377 $10,455 $10,673 Annual Utilities Number of additional employees needed Number of additional pieces of candy that can be processed per month 15,288 Lifespan 6 years 35,148 9 years The company pays its employees an average salary of $49,094 per year. The company makes a profit of $0.89 per piece of candy (assume all additional candy produced would be sold). Comparing the two alternatives using present worth analysis (see the video lecture "Multiple Projects - Unequal Life " if you are unsure what that means), what is the present worth of the Candylicious? Use an interest rate of 8% compounded annually to make your calculation. NOTE: • You only need to calculate the present worth of the Candylicious for this problem. You do not need to calculate the present worth for the Mighty Delighty. You do need to know the lifespan of the Mighty Delighty to make an accurate calculation • The number of pieces of candy is per month • If you are taking this quiz again, be sure you are making the calculation for the correct machine. Enter your answer as 1234 Round your answer. Do not use a dollar sign ("$"), any commas (";") or a decimal point ("").

Answer 1

Answer: Pv factor table @ 8% Year | 80% 0.9859 0.8573 0.7938 0.7380 - Cf Cash flow Profit = 12x15288 = 18 3456 € au fw 8'-1 DCF = CF X PUF 0.6806 Present value fac ton. 0.6302 4.6225 Now, I co Puf@8% DCF -95435 -95435 17493 Particulars 1 year first cost salvage value Annual utilities porofit Employee sabay | 1-6 0.6302 T1024 -13936 4.6228 - 64423 1839456 9.69.28 848080 49094 -4.6228 226959 996198 Present value-