You are considering relocating your outdoor-equipment manufacturing plant and have narrowed your choices to four possiblelocations based on the availability of high quality labor, rail transportation, and an adequate distribution network. Based on thefollowing costs and benefits associated with each location, use incremental analysis and IRR to choose the most cost-effectivelocation assuming MARR = 15%.Initial cost (Year 0)Annual operations and maintenancecosts (Years 1 thru 5)Annual gross benefits (Years 1 thru5)Upload Choose a FileQuestion 6Portland, OR Bend, OR Boise, ID$700,000 $800,000 $600,000500,000800,000Seattle, WA$1,000,0001,000,000 400,000 1,100,000You consider purchasing a new piece of equipment (7yr MACRS property) f1,375,000 625,000 1,500,000sodPOLE1-10 1

Data given: Description Portland,OR Bend,OR Boise,ID Seattle,WA Initial Cost ($) (Year 0)…

Answered: Initial cost (Year O) Annual operations…

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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Locations under consideration for a border patrol station have their costs estimated by the federal government. Use the B/C ratio method at an interest rate of 8% per year to determine which location to select, if any. Location North N South S Initial Cost. $ 960,000 2,900,000 Annual Cost, $ per Year 480,000 450,000 Disbenefits, $ per Year 70,000 60,000 00 Life, Years 00 The AB/C ratio is Select location (Click to select) v
The following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data Useful Life, Years First Cost Salvage Value Annual Benefit M&O M&O Gradient X 17 $2,090,000 $87,000 $396,000 $56,000 $9,000 X-TRUD 13 $2,610,000 $93,000 $534,000 $60,000 $11,000 SUPR-X 11 $2,430,000 $119,000 $638,000 $53,000 $13,000 The company's interest rate (MARR) is 21%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $-127,486 higher than X and $15,650 higher than X-TRUD. Choosing SUPR-X will maximize the EUAB-EAUC; its value is $117,514 higher than X and $126,650 higher than X-TRUD.
Costs assigned to an activity pool for teaching children to swim at the county park are $2,700 per month. Number of students is chosen as the cost driver. On average, 300 students take swim lessons monthly. What is the ABC allocation rate for this activity? O Not enough information given $27.00 $9.00 O s0.90
Modified Accelerated Cost Recovery System (MACRS) (LO 8.2) Calculate the following: Click here to access the various depreciation tables. If required, round your final answers to the nearest dollar. If your answer is zero, enter "0" b. The second year (2021) of depreciation on a computer that cost $5,000 purchased in May 2020, using the half-year convention and accelerated depreciation considering any bonus depreciation taken.$fill in the blank 41b92bfaafa5018_1 c. The first year of depreciation on a computer costing $2,800 purchased in May 2020, using the half-year convention and straight-line depreciation with no bonus depreciation.$fill in the blank dfbf18f8d052045_1
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: June $201,000 Manufacturing costs" Insurance expense** April May $157,200 $197,600 970 970 2,200 420 2,200 420 970 Depreciation expense Property tax expense*** "Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $970 a month; however, the insurance is paid four times yearly in the first month of the quarter, (.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are O&$187.500 b. $39,300 Oe5148,200 Od $226,800 2,200 420
Development cost Estimated development time Pilot testing Ramp-up cost Marketing and support cost Sales and production volume Unit production cost Unit price Interest rate PROJECT SCHEDULE KIDDY DOZER Development Pilot Testing Ramp-up Marketing and Support Production and Sales Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. Net present value NPV 50,000 NPV 70,000 Assume all cash flows occur at the end of each period. a. What is the net present value (discounted at 8%) of this project? Consider all costs and expected revenues. (Enter your answer In thousands of dollars. Perform all calculations using Excel. Do not round any Intermediate calculations. Round your answer to the nearest thousand.) $ (11,249,000) NPV 9% NPV 10% $800,000 $200,000 $400,000 $150,000 per year 60,000 per year 9 months YEAR 1 YEAR 2 YEAR 3 YEAR 4 Q₂ Q₂ Q3 Q Q Q₂ Q3…
nt riet erences Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $47,000, an annual operating cost (AOC) of $8,000, and a service life of 2 years. Method B will cost $88,000 to buy and will have an AOC of $7,500 over its 4-year service life. Method C costs $129,000 initially with an AOC of $4,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 10% of its first cost. Perform a future worth analysis to select the method at /= 14% per year. The future worth of method A is $[ The future worth of method B is $[ The future worth of method C is $[ Metho (Click to select) is selected. C
Current plan There are two fire brigades that each comprise five firefighters: three trainees and two experienced firefighters. The operating costs of each brigade, excluding staff salaries, average $130,000 per year. The equipment at each station initially cost $220,000 and has a current salvage value of $50,000. All equipment is depreciated on a straight-line basis based on an expected useful life of 10 years. Proposed plan Establish four fire brigades that each comprise three firefighters: two trainees and one experienced firefighter. The operating costs of each brigade, excluding staff salaries, is estimated to average $100,000 per year. Two more stations will need to be built, which would each cost $125,000. All existing equipment will be sold and replaced by upgraded equipment that would cost $250,000 per brigade. The average salary of trainee firefighters is $43,000 per year, while experienced firefighters earn $58,000 per year. A rate of return of 10% is required for…
Complete this question by entering your answers in the tabs below. Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 35 per unit Direct labor $ 55 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,350,000 (per year) Selling and administrative costs for the year Variable $ 775,000 Fixed $ 4,500,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $ 360 per unit Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Net income (loss)
The following data is available for Swifty Repair Shop for 2019: Repair technicians’ wages $260000 Fringe benefits 75000 Overhead 55000 Total $390000 The desired profit margin is $36 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5000 labor hours will be worked in 2019.In January 2019, Swifty repairs a bicycle that uses parts of $120. Its material loading charge on this repair would be $72. $114. $48. $198.
5. Dawg Engineering is considering a new machine for its assembly line, Each choice has a 10 year life. Calculate the IRR for each alternative Initial Cost $132,000.00 $186,000.00 $144,000.00 Annual Benefit $52,000.00 $42,00.00 $56,000.00 Yearly O & M $33,000.00 $12,000.00 $32,000.00 cost Salvage value $15,000.00 $9,000.00 $16,000.00 IRR-A IRR-B IRR-C
Reference: Case Study S Dunn Manufacturing is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Initial cost Benefits/year Machine X $120,000 $20,000 for the first 10 years and $9,000 for the next 10 years Life Salvage value $40,000 MARR 5.2. The NPW of machine X is A) $35,158 B) $48,192 C) $50,752 Machine Y $96,000 $12,000 per year for 20 years. 20 years 8% $20,000

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Initial cost (Year O) Annual operations and maintenance costs (Years 1 thru 5) Annual gross benefits (Years 1 thru 5) Upload Choose a File Portland, OR Bend, OR $700,000 $800,000 $600,000 500,000 Boise, ID 800,000 1,000,000 400,000 Seattle, WA $1,000,000 1,100,000 1,375,000 625,000 1,500,000