A thermoplastic film manufacturer is trying to decide between four types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenue are shown below. Compare them on the basis of rate of return and determine which process should be selected if the company's MARR is 6% per year. Alternative Vacuum Pressure Drape Free forming forming forming blowing Initial costs $31,000 $51,000 $43,000 $45,000 Annual expenses $4550 $4250 $4450 $5050 Annual revenue $8550 $12,250 $10,950 $12,050 Salvage value $3100 $5100 $1300 $4500 Life, years 8 8 8 8 IRR (%) 2.66 6.87 6.03 6.68
A thermoplastic film manufacturer is trying to decide between four types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenue are shown below. Compare them on the basis of rate of return and determine which process should be selected if the company's MARR is 6% per year. Alternative Vacuum Pressure Drape Free forming forming forming blowing Initial costs $31,000 $51,000 $43,000 $45,000 Annual expenses $4550 $4250 $4450 $5050 Annual revenue $8550 $12,250 $10,950 $12,050 Salvage value $3100 $5100 $1300 $4500 Life, years 8 8 8 8 IRR (%) 2.66 6.87 6.03 6.68
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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Please show all work step by step including formulas.. not using excel. must show work.
Transcribed Image Text:A thermoplastic film manufacturer is trying to decide between four types of thermoforming molding
processes to be added to its molding operation. The estimated costs and revenue are shown below.
Compare them on the basis of rate of return and determine which process should be selected if the
company's MARR is 6% per year.
Alternative
Vacuum
Pressure
Drape
Free
forming
forming
forming
blowing
Initial costs
$31,000
$51,000
$43,000
$45,000
Annual expenses
$4550
$4250
$4450
$5050
Annual revenue
$8550
$12,250
$10,950
$12,050
Salvage value
$3100
$5100
$1300
$4500
Life, years
8
8
8
8
IRR (%)
2.66
6.87
6.03
6.68
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