Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts:a. What are the profitability indexes of the projects?b. What should Fabulous Fabricators do?Data table(Click on the following icon in order to copy its contents into a spreadsheet.)ContractANPV$1.98 millionUse of Facility100%B$1.01 million57%C$1.49 million43%PrintDone- X☑

To solve this, we need to calculate the profitability index (PI) for each contract and then…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 11MC: Dixon Construction Materials has collected this information: Based on this Information, what is the...

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6. Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? **round to two decimal places**
Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: (a) Invest in A (b) Invest in C (c) Invest in C and B (d) Invest in B
5. Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? **round to two decimal places**
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Objective: Should WAW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 230,000Taxes, insurance, and repairs (per year)$ 30,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WAW can make$ 500,000Remainder in four payments of;$ 180,000Option 2: LeaseIntended years of use20First lease payment due now$ 100,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WAWRepairs (annual)$ 7,000Maintenance (annual)$ 25,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).
Subject : Engineering Economy and Management
You have been requested to recommend one of the mutually exclusive industrial sanitation control systems that are given below. If MARR is 15% per year, which system would you select? Use the B–C method.
You have been requested to offer a recommendation of one of the mutually exclusive industrial sanitation control systems that follow. If the MARR is 15% per year, which system would you select? Use the IRR method.
Should WLW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 360,000Taxes, insurance, and repairs (per year)$ 34,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WLW can make$ 500,000Remainder in four payments of;$ 160,000Revenue opportunityBuilding annex will be leased to a tenant and will generate a lease revenue (per year) for 10 years$60,000Option 2: LeaseIntended years of use20First lease payment due now$ 90,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WLWRepairs (annual)$ 9,000Maintenance (annual)$ 26,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).
19. Economic data pertaining to three mutually exclusive layout design of a small facility are given in the following table. Suggest, for an M.A.R.R. is 15% per year, determine which layout design will you recommend using all methods for selecting among alternatives. Layout Designs II II Capital investment (P) Net annual revenue (P) -13,000,000 4,500,000 99,900 6,500,000 2,650,000 15,000 10,00,000 3,84,000 25,000 Salvage value(P) Useful life (years) 10 10 10
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