Interglobal Paper Company has asked for your help in comparing its present computer systems with a new one. Its board of directors would like to see implemented. Proposed system and present system costs are as follows: Item Year 1 Equipment Lease Salaries Overhead Development Year 2 Equipment Lease Salaries Overhead Development Year 3 Equipment Lease Salaries Overhead Development Year 4 Equipment Lease Salaries Overhead Development Proposed System Costs 20,000 30,000 4,000 30,000 20,000 33,000 4,400 12,000 20,000 36,000 4,900 10000 20,000 39,000 5,500 8,000 a. Graph the costs and show the break-even point. b. Explain your recommendation. Present System Costs 11,500 50,000 3,000 8,000 10,500 55,000 3,300 10,000 10,500 60,000 3,600 16,000 10,500 66,000 000 12,000

Interglobal Paper Company has asked for your help in comparing its present computer systems with a new one. Its board of directors would like to see implemented. Proposed system and present system costs are as follows: Item Year 1 Equipment Lease Salaries Overhead Development Year 2 Equipment Lease Salaries Overhead Development Year 3 Equipment Lease Salaries Overhead Development Year 4 Equipment Lease Salaries Overhead Development Proposed System Costs 20,000 30,000 4,000 30,000 20,000 33,000 4,400 12,000 20,000 36,000 4,900 10000 20,000 39,000 5,500 8,000 a. Graph the costs and show the break-even point. b. Explain your recommendation. Present System Costs 11,500 50,000 3,000 8,000 10,500 55,000 3,300 10,000 10,500 60,000 3,600 16,000 10,500 66,000 000 12,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Economics URGENT PLEASE** As a PMO officer, you are asked to do an evaluation for a natural gas pipeline right in the middle of the project’s planned schedule. There are concerns that it will go over budget and schedule because 40 million dollars has been spent in the project so far. According to the project charter, the pipeline length is 72 km and must be completed in 6 months, with a budget of 57.6 million AUD. You performed an inspection and find out that installation of 30 km of pipeline has been completed. Using earned value analysis, answer the following questions: A) What is the earned value (EV) for this project at the time of inspection (month 3)? B) What is the planned value (PV) for this project at the time of inspection? C) Calculate the Schedule variance (SV) and the cost variance (CV) at month 4. What do they mean? D) Calculate the Schedule performance index (SPI) and the cost performance index (CPI) at the time of inspection. What do they mean? [ E) According to your…
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Background:New Pumper system equipment is under consideration by a gulf coast chemical processing plant. One crucial pump moves highly corrosive liquids from specially lined tanks on intercoastal barges into storage and preliminary refining facilities dockside. Beacuse of the variable quality of the raw chemical and the igh pressures imposed on the pump chassis and impellers, a close log is maintained on the number of hours per year that the pump operates safety records and pump componenet deterioration are considered critical control points for this system. As currently planned, rebuild and M&O cost estimates are increased accordingly when cummulative operating time reaches the 6000-hour mark. Information:- First cost: $800,000- Rebuild Cost: $150,000 whenever 6000 cumulative hours are logged. Each rework will cost 20% more than the previous one. A maximum of three rebuilds are allowed.- M&O Costs: $25,000 for each year 1 through 4 $40,000 per year starting the year after the…
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General Motors Corporation in their Detroit plant, makes industrial strength eight-cylinder engines that are used in their heavy duty automobiles Operations manager at Detroit plant has developed the following supply, demand, cost, and inventory data for future planning purposes. Supply Available Regular Time Demand Forecast Period Overtime Subcontract 1 40 15 10 40 2 30 15 10 55 3 30 20 10 50 20 units $100 Initial inventory Regular-time cost per unit Overtime cost per unit Subcontract cost per unit $160 $200 Carrying cost per unit per month $6 Assuming the initial inventory has no holding cost in the first period and that backorders are not permitted.
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