Answered: A new machine with a purchase price of…

A new machine with a purchase price of $90,000, transportation costs of $8,000, installation costs of $6,000, and special handling fees of $2,000, would have a cost basis of: find out

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

See similar textbooks

Similar questions

A new machine with a purchase price of $90,000, transportation costs of $8,000, installation costs of $6,000, and special handling fees of $2,000, would have a cost basis of:
Use the information contained below to compress one time unit per move using the leastcost method. Assume the total indirect cost for the project is $700 and there is a savingsof $50 per time unit reduced. Record the total direct, indirect, and project costs for eachduration. What is the optimum cost-time schedule for the project? What is the cost?
Please answer correct with good presentation using commas and dollar sign in each figure Opportunity Costs A new project requires the use of an existing machine that would otherwise be sold. Information concerning the machine is as follows: Original purchase price $20,000 Current net book value (NBV) $5,000 Estimated current sales value $4,000. Required: What is the relevant cost (if any) if using the machine in the project?
MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine 1 costs $450,000, but yields a 15 percent savings over the current machine used. Machine 2 costs $800,000, but yields a 25 percent savings over the current machine used. In order to meet demand, the following forecasted cost information for the current machine is also provided. LOADING... Year Project Cost 1 1,000,000 2 1,350,000 3 1,450,000 4 1,550,000 5 2,550,000 a. Based on the NPV of the cash flows for these 5 years, which machine should MKM International purchase? Assume a discount rate of 12 percent. Assuming a discount rate of 12 percent, MKM International should purchase ▼ machine 1 or machine 2 because the NPV of machine 1 is $------ and the NPV of machine 2 is $--------. (Enter your responses…
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Machine A could be purchased for $60,500. It will last 10 years with annual maintenance costs of $2,100 per year. After 10 years the machine can be sold for $6,050. Machine B could be purchased for $55,000. It also will last 10 years and will require maintenance costs of $8,400 in year three, $10,500 in year six, and $12,600 in year eight. After 10 years, the machine will have no salvage value. Required:Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine…
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Machine A could be purchased for $60,500. It will last 10 years with annual maintenance costs of $2,100 per year. After 10 years the machine can be sold for $6,050. Machine B could be purchased for $55,000. It also will last 10 years and will require maintenance costs of $8,400 in year three, $10,500 in year six, and $12,600 in year eight. After 10 years, the machine will have no salvage value. Required:Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine…
A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the shown Table. Which machine should be selected if the MARR is 15% per year? Show all your work to support your recommendation. Assumptions: The facility will operate 2,000 hours per year. Machine availability is 80% for Machine D1 and 75% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. State any other assumptions needed to solve the problem.
a) Compare the two sites in terms of their fixed, variable, and total costs.
The operation manager at Sebago manufacturing is considering three proposals for supplying a critical component for its new line of electric watercraft. Proposal 1 is to purchase the component; proposal 2 is to make the component in house rebuilt equipment; and proposal 3 is to purchase new, highly automated equipment. The costs associated with each proposals are provided. At what quantity range will each option be preferred? propsal 1 annual cost of capital = 0 variable cost of each $22.00 proposal 2 annual cost of capital = $150,000 variable cost = $14.00 prosal 3 annual cost of capital = $450,000 variable cost = $12.50
The operations manager at Sebago Manufacturing is considering three proposals for supplying a critical component for its new line of electric watercraft. Proposal one is to purchase the component, proposal two is make the component in-house using rebuilt equipment, and proposal three is to purchase new, highly automated equipment. The costs associated with each proposal are provided in the table below. Proposal Annual cost ofcapital required Variable cost ofeach component One: purchase $0.00 $22.00 Two: make with rebuiltequipment $150,000.00 $14.00 Three: make with newequipment $450,000.00 $12.50 At what quantity range will each option be preferred?
If the air-conditioning system for a 200,000 ft2 building is estimated to be 400 ft2 per ton and to cost $4000 per ton, then what will be the system cost? And If, through load management, the system capacity for the building in above problem is reduced by 10%, will the system cost be reduced by 10%? If not, why?
Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?