A manufacturing company is evaluating an investment plan to produce a new product based on the followingestimated data:• Equipment Cost: $150,000• Overhead Cost: $30,000/year• Sales price: $12/unitOperation cost: $20/operating hour• Production time: O.1 hour/unit• Planning horizon: 4 years• MARR: 15%Salvage value after 4 years: 0By using break-even analysis, the break-even sales value for the product should be:Select one:a. 6755 units Xb. 8255 unitsC. 9755 unitsd. 11,255 unitsThe correct answer is: 8255 units

A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit • Operation cost: $20/operating hour • Production time: 0.1 hour/unit • Planning horizon: 4 years • MARR: 15% • Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be:

A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit • Operation cost: $20/operating hour • Production time: 0.1 hour/unit • Planning horizon: 4 years • MARR: 15% • Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life (yrs) 10 15 Elec. Savings Elec. Cost (kWh/yr) ($/kWh) 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%
Question 1 A design firm is considering multiple independent projects for the upcoming quarter. For a MARR of 6.5% per quarter. What is your recommendation to the company based on a PW analysis? Project Initial Payment Monthly Costs (Today) A $1,500,000 $170,000 B $245,000 $200,000 C $300,000 $150,000 Payments are inflows for the design firm. Costs are outflows for the design firm. Payment at month 12 of $1,000,000 Costs at month 9 of $100,000 None Final Payment (At end of project) $3,000,000 Project Length Other Cash flows 2 years $3,000,000 18 months $4,000,000 30 months
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If specific duty is $2 per dozen and ad valorem duty is 20%, find the total duty on 12 dozen padlocks valued at $650.
You have decided to open a microbrewery selling university-themed beers as one of your product lines. You need to conduct a breakeven analysis of sales and price. You know your fixed costs but based on your marketing plan you are not sure of pricing and sales. Your company MARR is 5%, and fixed costs include an initial capital investment of $250,000 with fixed annual expenses of $100,000. Use a 5-year planning horizon and assume that these expenses will not grow with inflation. a. Draw the cash flow diagram. b. Populate the following table and plot the NPW results in a meaningful plot. (Make sure you label your axis, and your plot should contain three curves.) c. Make a pricing recommendation as a function of sales. You would like to make a minimum of $100,000 for your work on this project.
work on part C
RESUELVA EL SIGUIENTE PROBLEMA Investment Annual operating Cost. Began first (1)year until the 6th year (A=$1,500) Annual Revenues: Began first (1¹h)year until the 6th year. Additional Revenues: Gradient beginning 2nd year G= $800 until the 6th year. Salvage Value at the end of 6th year or MV8= $2,000 Investment life n=6 years. MARR=6% $10,000 1,500 2,500 G=$800 MV6= $2,000 a. Draw the cash flow diagram b. PW, AW and FW Determine if the investment is viable or not. c. IRR d. ERR
! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $6,000 over its 4-year service life. Method C costs $125,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at /= 12% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ ✓is selected. Method C
You are considering an investment project with the financial information provided below. Suppose the company is most concerned about the impact of its price estimate on the project's rate of return. How would you address this concern? The break-even value of unit price is ?
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