Analyze a CSR capital investment proposal for Ganon Inc.Ganon Inc. is evaluating a proposal to replace its HID (high intensity discharge) lighting with LED (light emitting diode) lighting throughout its warehouse. LED lighting consumes less power and lasts longer than HID lighting for similar performance.The following information was developed:HID watt hour consumption per fixtureLED watt hour consumption per fixtureNumber of fixturesLifetime investment cost (in present value terms)to replace each HID fixture with LED500 watts per hr.300 watts per hr.800$30010300$0.12Operating hours per dayOperating days per yearMetered utility rate per kilowatt-hour (kWh)**Note: A kilowatt-hour is equal to 1,000 watts per hour.a. Determine the investment cost for replacing the 800 fixtures.240,000 ✓c. Should the proposal be accepted?Yesb. Determine the annual utility cost savings from employing the new energy solution.$ 57,600 ✓Evaluate the proposal using net present value, assuming a 15-year life and 8% minimum rate of return. (Click here to view Present Value of Ordinary Annuity.)$-253,021 X

Making decisions about capital budgeting entails assessing and choosing capital expenditures or…

Answered: Ganon Inc. is evaluating a proposal to…

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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Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.51 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.70 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.127. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a return of 10 percent and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour? (Do not round intermediate calculations and round your answer to 6 decimal places, e.g., 32.161616.)
Please correct answer and don't use hend raiting
Karabuk casting factory wants to buy a furnace to meet their increasing production demands. As a result of the studies, the data in the table below were found. Based on these data, what will be future value (FV) of the scrap value of alternative B? For Alternative B; Purchase Cost= 12000 Annual Operating Expense= 1700 Scrap Value= 3000 Economic Life= 4 Capital Cost = 10% Ans: 3000
please no excel!! please show all work and calculations thank you
Godo
Consider a drill press containing three drill bits. The current policy (called individual replacement) is to replace a drill bit when it fails. The firm is considering changing to a block replacement policy in which all three drillbits are replaced whenever a single drill bit fails. Each time the drill press is shut down, the cost is $100. A drill bit costs $50, and the variable cost of replacing a drill bit is $10. Assume that the time to replace a drill bit isnegligible. Also, assume that the time until failure for a drill bit follows an exponential distribution with a mean of 100 hours. This can be modeled in @RISK with the formula 5RISKEXPON (100). (Note: If you have the academic version of @RISK, this problem will require more RISKEXPON functions than the 100 allowed, but there is an easy workaround. An exponentially distributed random variable can be generated with Excel functions only using the formula =-Mean*LN(RAND()). Then @RISK can still be used to run the simulation.)…
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.
Three types of bits can be used in an automated drilling operation. A bright high-speed steel (HSS) bit is the least expensive to buy, but it has a shorter life than either gold oxide or titanium nitride bits. The HSS bits will cost $3500 to buy and will last for 3 months under the conditions of use. The operating cost for these bits will be $2000 per month. The gold oxide bits will cost $6500 to buy and will last for 6 months with an operating cost of $1500 per month. The titanium nitride bits will cost $7000 to buy and will last 6 months with an operating cost of $1200 per month. At an interest rate of 12% per year compounded monthly, which type of drill bit should be selected? Use a future worth analysis.
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?
Vishunu
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
Light emitting diodes (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.55 and lasts 1,000 hours. A 15-watt LED, which provides the same light, costs $3.90 and lasts for 12,000 hours. A kilowatt-hour of electricity costs $.131. A kilowatt-hour is 1,000 watts for 1 hour. If you require a return of 11 percent and use a light fixture 500 hours per year, what is the equivalent annual cost of each light bulb? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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