Homework Help is Here – Start Your Trial Now!
Business
Economics
Gethsemane Products Inc. is the leading manufacturer of cooking oil in the market. To cater to the increasing demand, the executives have decided to invest in a better machinery that could increase production output per machine hour. The engineers working for the plant gathered the following data for the managers to consider and to choose from. The options below have the same acceptable production output rate. The company's MARR is at 8%. Supplier Damascus Суprus Engineering Works Inc. P10,650,000 Alpha Machineries Bros. Со. P11,800,000 P11,000,000 Capital Investment Annual P8,000,000 P9,100,000 P9,100,000 Revenue Annual P6,100,000 P5,750,000 P5,590,000 Expenses (excluding depreciation) Useful Life 6 уears Salvage Value P900,000 6 years P400,000 5 years P890,000 a. If the repeatability assumption is applied, which among the options above should be chosen using the present worth method? b. Construct an ATCF table for the chosen machinery from (a). Use the straight-line method of depreciation and a 38% tax rate

Gethsemane Products Inc. is the leading manufacturer of cooking oil in the market. To cater to the increasing demand, the executives have decided to invest in a better machinery that could increase production output per machine hour. The engineers working for the plant gathered the following data for the managers to consider and to choose from. The options below have the same acceptable production output rate. The company's MARR is at 8%. Supplier Damascus Суprus Engineering Works Inc. P10,650,000 Alpha Machineries Bros. Со. P11,800,000 P11,000,000 Capital Investment Annual P8,000,000 P9,100,000 P9,100,000 Revenue Annual P6,100,000 P5,750,000 P5,590,000 Expenses (excluding depreciation) Useful Life 6 уears Salvage Value P900,000 6 years P400,000 5 years P890,000 a. If the repeatability assumption is applied, which among the options above should be chosen using the present worth method? b. Construct an ATCF table for the chosen machinery from (a). Use the straight-line method of depreciation and a 38% tax rate

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
Gethsemane Products Inc. is the leading manufacturer of cooking oil in the market. To cater to the increasing demand, the executives have decided to invest in a better machinery that could increase production output per machine hour. The engineers working for the plant gathered the following data for the managers to consider and to choose from. The options below have the same acceptable production output rate. The company's MARR is at 8%. Supplier Суprus Engineering Works Inc. P10,650,000 Damascus Alpha Machineries Со. Bros. Capital Investment Annual P11,000,000 P11,800,000 P8,000,000 P9,100,000 P9,100,000 Revenue Annual P6,100,000 P5,750,000 P5,590,000 Expenses (excluding depreciation) Useful Life 6 years Salvage Value P900,000 6 уears P400,000 5 years P890,000 a. If the repeatability assumption is applied, which among the options above should be chosen using the present worth method? b. Construct an ATCF table for the chosen machinery from (a). Use the straight-line method of depreciation and a 38% tax rate
Transcribed Image Text:Gethsemane Products Inc. is the leading manufacturer of cooking oil in the market. To cater to the increasing demand, the executives have decided to invest in a better machinery that could increase production output per machine hour. The engineers working for the plant gathered the following data for the managers to consider and to choose from. The options below have the same acceptable production output rate. The company's MARR is at 8%. Supplier Суprus Engineering Works Inc. P10,650,000 Damascus Alpha Machineries Со. Bros. Capital Investment Annual P11,000,000 P11,800,000 P8,000,000 P9,100,000 P9,100,000 Revenue Annual P6,100,000 P5,750,000 P5,590,000 Expenses (excluding depreciation) Useful Life 6 years Salvage Value P900,000 6 уears P400,000 5 years P890,000 a. If the repeatability assumption is applied, which among the options above should be chosen using the present worth method? b. Construct an ATCF table for the chosen machinery from (a). Use the straight-line method of depreciation and a 38% tax rate
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS