3. Grade Motor Co. is considering two different makes of blow molding machine for one of its automotive products. The cost data for the two alternatives are provided in table below. MARR = 12. Using IRR analysis, state which equipment should be bought. Use 12% as the initial guess for IRR. Initial cost Annual operating cost Benefits/Year Salvage value It ifa Equipment XEquipment Y $160K $285K 45K 90K 20K 10 Years 45K 105K 40K

3. Grade Motor Co. is considering two different makes of blow molding machine for one of its automotive products. The cost data for the two alternatives are provided in table below. MARR = 12. Using IRR analysis, state which equipment should be bought. Use 12% as the initial guess for IRR. Initial cost Annual operating cost Benefits/Year Salvage value It ifa Equipment XEquipment Y $160K $285K 45K 90K 20K 10 Years 45K 105K 40K

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the profitability of the following proposal using Average rate of return (ARR) methodProposal I Automatic machine Cost OMR 420000Estimated life 6.5 yearsEstimated sales P.A OMR 175000Cost : Material OMR 60000Labour OMR 22000Variable overheads OMR 14000 a. 16.53% b. All the options are wrong c. 3.42% d. 4.62%
Calculate the profitability of the following proposal using Average rate of return (ARR) method Proposal I Automatic machine Cost OMR 320000 Estimated life 6.5 years Estimated sales P.A160000 Cost : Material OMR 60000 Labour OMR 22000 Variable overheads OMR 14000 O a. All the options are wrong Оь. 16.53% О С.3.42% O d. 4.62%
1. COMPARING ALTERNATIVES- YOU WERE EMPLOYED IN A BPO COMPANY AND YOUR COMPANY TASKED YOU TO BUY A NEW ROUTER TO BOOST YOUR CONNECTIVITY WITH MANY NETWORKS SWITCH. THERE ARE FOUR AVAILABLE PRODUCTS TO CHOOSE FROM WITH THE FF COST DATA. COST DATA Brand A C D FIRST COST 24K 30K 49.6K 52K LABOR/YR MAINTENANCE/YR TAXES/INSURANCE 11.6K 9.32K 4.2K 2K 2.8K 1.9K 1.3K 0.7K 3% of ist cost 3% of ist cost 3% of ist cost 3% of ist cost POWER/YR 1.3K 1.36K 2.4K 2.020K LIFE,YRS 5 a. IF THE COST OF MONEY IS 17%, CHOOSE THE BEST ALTERNATIVE THAT YOU WILL RECOMMEND USING ANNUAL WORTH METHOD. b. PRESENT YOUR ANSWER IN MATRIX FORM. c. SHOW YOUR COMPUTATION ON DEPRECIATION USING SINKING FUND FORMULA. 2. IN CASE YOU PREFER A CERTAIN BRAND BUT IT DID NOT MEET THE ANNUAL COST CRITERIA, WHAT ARE THE OPTIONS YOU WILL DO IN ORDER THAT THE PREFERRED BRAND WILL BE ACCEPTED BY TOP MANAGEMENT? THE QUALITY OF BRAND A, B, C, & D ARE AT THE SAME LEVEL.
Calculate the profitability of the following proposal using Return on investment method Proposal I Automatic machine Cost 320000 Estimated life 6.5 years Estimated sales p.a 160000 Cost : Material 60000 Labor 22000 Variable overheads 14000 O a. 16.53% O b. 3.42% O c. 4.62% O d. All the options are wrong
Calculate the profitability of the following proposal using Average rate return (ARR) methodProposal IAutomatic machine Cost OMR 320000Estimated life4.5 yearsEstimated sales P.A 220000Cost : Material OMR 60000 Labour OMR 22000 Variable overheads OMR14000 a.16.53% b.3.19% c.4.62% d.All the options are wrong
The following information refers to three mutually exclusive alternatives. The decision maker wishes to choose the right machine but is uncertain what MARR to use. Create a choice table that will help the decision maker to make the correct economic decision.
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The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The selling price for the product will be $45 per unit. Probability distributions for the purchase cost, the labor cost, and the transportation cost are estimated as follows: ProcurementCost ($) Probability LaborCost ($) Probability TransportationCost ($) Probability 10 0.2 18 0.25 2 0.74 12 0.35 20 0.35 5 0.26 13 0.45 22 0.1 25 0.3 Compute profit per unit for the base-case, worst-case, and best-case scenarios.Profit per unit for the base-case: $ fill in the blank 1Profit per unit for the worst-case: $ fill in the blank 2Profit per unit for the best-case: $ fill in the blank 3 Construct a simulation model to estimate the mean profit per unit. If required, round your answer to the nearest cent.Mean profit per unit = $ fill in the blank 4 Why is the simulation approach to risk analysis preferable to generating a variety of…
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Marigold Corp. is using the target cost approach on a new product. Information gathered so far is as follows: Expected annual sales Desired profit per unit Target cost What is the unit selling price? O $0.30 O $0.64 O $0.62 O $0.32 500000 units $0.32 $150000
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