Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filamentwith 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?perMethodDDMLSFirst Cost$-200,000$-40,000$-500,000M&O Cost, per Year$-40,000Salvage ValueLife$2,000$21,0002 years4 yearsThe present worth for the DDM method is $The present worth for the LS method is $The (Click to select) v method is selected.

Solution: - Calculation of present worth for DDM method as follows under: -

Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filamen 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% per year, which alternative has the lower present worth? Method DDM LS First Cost $-200,000 $-500,000 M&O Cost, per Year $-40,000 Salvage Value Life $-40,000 $21,000 $2,000 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.

Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filamen 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% per year, which alternative has the lower present worth? Method DDM LS First Cost $-200,000 $-500,000 M&O Cost, per Year $-40,000 Salvage Value Life $-40,000 $21,000 $2,000 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Silastic-LC-50 is a liquid silicon rubber designed to provide excellent clarity, superior mechanical…

A: Computation:

Q: Aguilera Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant…

Q: AKO Tire Company is evaluating whether it should retain the current melting process that uses a…

A: To calculate the replacement value, NPV is calculated. It is the net current worth of cash flows…

Q: Barker Production Company is considering the purchase of a flexible manufacturing system. The annual…

A: Compute Annual cash inflow or savings: Amount Decreased waste $75,000 Increased quality…

Q: MKM International is seeking to purchase a new CNC ma-chine in order to reduce costs. Two…

A: a) Working note:

Q: Machine X Machine Y $ 6,000 7 years $12,000 13 years $4,000 $175 Initial Cost Estimated Life Salvage…

A: Solution : If we having two option for purchase of Machine & cost/ Expenses details was given of…

Q: The engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an enterprise resource…

A: Vendor A Initial cost = $395,000 Incremental revenue = $110,000 Life, n = 4 years MARR, r = 8%…

Q: Wilson Partners manufactures thermocouples for remote temperature monitoring of electronics…

A: Cost of current structure: Workings:

Q: Billingham Packaging is considering expanding its production capacity by purchasing a new machine,…

A: Given, Sales revenue (YEAR 1-10) = 10.05 million or 10,500,000 COGS…

Q: Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a…

A: Sometimes Old Machine Replaced with New Machines to Increase the income earned. there are so many…

Q: Mocktober Clothing is considering a new project to sell a unique annual hoodie for each of the next…

A: Here,Selling Price (SP) is $50Variable Cost (VC) is $25Fixed Costs us $10,000Cost of Machinery is…

Q: Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards…

A: Present worth of this investment :— It is the sum of all present value of future cash flows. It is…

Q: A firm must decide between two silicon layer chip designs from Intel. Their effective income tax…

A: IRR is the return a project generates in its lifetime expressed in annual terms. It is calculated by…

Q: To recover the waste heat from the processed fluid, a chemical industry planned to invest in a heat…

A: a. Calculate Incremental investment returns. Suggestion: Heat Exchanger 1 should be purchased as it…

Q: The manager of Liquid Sleeve Inc., a company that makes a sealing solution for machine shaft…

A: Part 2: Explanation:Step 1: Calculate the incremental net cash flows for each year.For Fe…

Q: A large textile company is trying to decide which sludge dewatering process it should use ahead of…

A: The problem is asking us to compare two systems, a centrifuge and a belt press, based on their…

Q: ing the component (option B). Details of the two options are given below: Option A : Three…

A: In the given question, a component can either be produced in-house or purchased from outside. We…

Q: Grove Audio is considering the Introduction of a new model of wireless speakers with the following…

A: Break even point :— It is the point of production where total cost is equal to total revenue. At…

Q: The Manager of a canned food processing plant is trying to decide between two labelling machines.…

A: Equivalent Annual CostEquivalent Annual Cost (EAC) is a financial measurement employed to assess and…

Q: Billingham Packaging is considering expanding its production capacity by purchasing a new machine,…

A: The difference between the present value of cash inflows and outflows over time is known as net…

Q: Aria Acoustics, Incorporated (AAI), projects unit sales for a new 7-octave voice emulation implant…

A: Capital budgeting, often referred to as investment appraisal or capital expenditure (CAPEX)…

Q: A company that makes food-friendly silicone (for use in cooking and baking pan coatings) is…

A: PW=-P+A(P/A,i,n)+F(P/F,i,n)where,PW=Present WorthP=The initial costA=Amount of annual net…

Q: An assembly operation at a software company now requires $250,000 per year in labor costs. A robot…

A: Capital budgeting is the process that is used to evaluate the investment proposals and take decision…

Q: You have been asked to determine the most fınancially advantageous option for a new Product…

A: The question is based on the calculation of annual worth for long term investment. Annual worth is…

Q: Two different copying machines are being considered in your company. The Mortar copier would be…

A: The capital budgeting is a technique that helps to analyze the profitability of the project.

Q: Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a…

A: $43,000*5yrs = $215,000$15,000*5yrs = $75,000 Note: "()" = Negative sign or "-"

Q: A 3 year-old a computer-controlled fabric cutting machine, which had a $20,000 purchasing price, has…

A: Solution- A 3 year old a computer controlled fabric cutting machine, which had $20,000 purchasing…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

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.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $410,000 initially and is expected to increase revenue $110,000 per year every year. The software and installation from Vendor B costs $290,000 and is expected to increase revenue $95,000 per year. Manuel's uses a 4- year planning horizon and a 12.0% per year MARR. Part a 8 Your answer is incorrect. What is the present worth of each investment? Vendor A: $ Vendor B: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.
Project A involves a new type of graphite composite in-line skate wheel We think we can sell 6.000 units per vear at a price of Rs 1.000 each. Variable costs will run about Rs 400 per unit and the product should have a four-year lite Fixed costs for the project will run Rs 450,0000 per year. Further, we will need to invest a total of 1, 250, 000 in manufacturing equipment. This equipment is seven-year MACRS property for tax purposes. In four years, the equipment will be worth about halt of what we paid for it. We will have to invest Rs 1.150,000 in net working capital at the start. After that net working capital requirements will be 25 percent of sales Based on above information for project A should we undertake the venture Assume a 28 percent required return. Use a 34 percent tax rate throughout the project life
Vikarmbhai
A small company that manufactures vibration isolation platforms is trying to decide whether it should immediately upgrade the current assemblysystem D, which is rather labor-intensive, with the more highly automated system C one year from now. Some components of the current system canbe sold now for $9000, but they will be worthless hereafter. The operating cost of the existing system is $192,000 per year. System C will cost $320,000 with a $50,000 salvage value after four years. Its operating cost will be $68,000 per year. If you are told to do a replacement analysis using an interest rate of 10% per year, which system do you recommend?
A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
A distribution center wants to evaluate an alternative product tracking system. The system has an initial cost of $500,000 and a useful life of 7 years. The operating cost is estimated to be $550 per metric ton of product moved per day. The center can handle between 30 and 50 tons per day. Analyze the sensitivity of the PW to changes in a 10-metric-ton increment of product moved. Use an interest rate of 3% per year and 200 days of work per year. Find the PW of 3 options.
Bhupatbhai
Salty Nuts, Inc. must buy a new nut-shelling machine. The industrial engineer has collected the following information concerning the apparent best alternative. Calculate the net future worth of the alternative if the MARR is 6%.