A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year.Cections 5.1 & 5.2)Machine RMachine SFirst cost, $-250,000|-40,000-370,500-50,000Annual operating cost, $ per yearLife, years24Salvage value, $20,00020,000

Annual operating cost is the cost which a firm is required to operate an asset on annual basis. This…

A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year. ections 5.1 & 5.2) Machine R Machine S -370,500 First cost, $ Annual operating cost, $ per year -250,000 -40,000 -50,000

A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year. ections 5.1 & 5.2) Machine R Machine S -370,500 First cost, $ Annual operating cost, $ per year -250,000 -40,000 -50,000

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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Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 17%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed Working capital needed) Overhaul of the equipment in two years. Salvage value of the equipment in four years Annual revenues and costs: Sales revenues $ 275,000 $ 86,000 $10,000 $ 13,000 $ 420,000 Variable expenses $ 205,000 Fixed out-of-pocket operating costs $ 87,000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.)
Two equipments A and B have initial costs of $100,000 and $120,000 and expected to generate annual savings during the first year of $88,000 and $98,000 respectively. The value of these annual savings is expected to increase by 10% per year (over previous period). Assume service life of 2 years, operating hours per year of 4500, Determine the $ savings/ hour for each equipment and select the optimal equipment based on your results. Use i = 10%.
Dynetics Corp
Godo
Consider how Cherry Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million River Park Lodge expansion would be a good investment. (Click the icon to view the expansion estimates.) Assume that Cherry Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $750,000 at the end of its nine-year life. Read the requirements.
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 15% year, which alternative has the lower present worth? per Method DDM LS First Cost $-200,000 $-40,000 $-500,000 M&O Cost, per Year $-40,000 Salvage Value Life $2,000 $21,000 2 years 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The (Click to select) v method is selected.
Bhupatbhai
Make or Buy Alternative 12. Your production line uses 10,000 filter housings per week at a cost of $0.85 per unit. Should you start making them yourself? MARR = 12%. Make Buy Capital Expenditure Salvage (after 10 yr) Annual O/M $240K $45K $233K $300K $150K $256K $939K $442K $240K $100K $200K Materials Overhead Labor Maintenance Total $982K
s
Mowbot's management is evaluating new proposals for production machines from three companies: Brawn Up front cost Annual cost saving Life (years) $ $ Apex (150,000) $ 63,000 $ 4 (200,000) $ 81,000 $ Cameo (250,000)102,000 4 4 Use incremental present worth analysis to decide which alternative should be recommended. MARR is 18%.
Jack McGuire has been with Bulk Productions Group (BPG) for 14 years. McGuire decides to start slow with a project testing the increased automation of their horse feed line. Below are the projected cost of the expansion in automation, given a 5 year useful life of the robotic equipment: Direct Cost of Automation Purchase price of new robotic equipment $1,450,000 Sales tax on equipment $87,000 Shipping cost of equipment $63,000 Equipment installation $175,000 Software $98,000 Initial system and equipment testing $25,000 Equipment scrap value after five years $70,000 Annual Warranty Service Contract $21,000 robotics proposal one plant supervisor position with a salary of $98,000 per year. Two machine will need to be hired at $41,000 each. The automation and related electronics will increase energy usage by $126,000 per year. The software will create an expected savings of $210,000 per year Automation efficiencies will create a…

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