Annual O&MAnnual increase4%0.3Major maintenance 185210(Year 25)Salvage cost3027Javier is an IE at Lobos Manufacturing. He has been studying processline G to determine if an automated system would be preferred to theexisting labor-intensive system. If Lobos wants to earn at least 20%and uses a 15-year planning horizon, which alternative is preferred?Contributed by Paul R. McCright, University of South FloridaLabor Intensive AutomatedInitial cost$0$110,000Installation cost18,500First-year O&M2,0004,800Annual increase450950First-year labor costs72,00047,500Annual increase5%5%Salvage value (EOY15) 2,50020,000In an analysis one alternative has a net present worth of $4200, based5 on a 6-year analysis period that matches its useful life. A 9% interest|rate was used. The replacement will be an identical item with thesame cost, benefits, and useful life. Using a 9% interest rate, computethe net present worth for a 12-year analysis period.ves DifferUse a 10-year analysis period and an 8% interest rate to determinewhich alternative should be selected:AВFirst cost$6500 $12,000Uniform annual benefit $1800 $2000Useful life, in years10

The Net Present Value: The Net Present Value is a capital budgeting technique that measures the net…

Answered: Javier is an IE at Lobos Manufacturing.…

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

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Sunland has recently started to manufacture RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,000 RecRobos is as follows: Direct materials ($37 per robot) Direct labour ($29 per robot) Variable overhead ($4 per robot) Allocated fixed overhead ($23 per robot) Total Cost $740,000 580,000 --dinthe 80,000 460,000 $1,860,000 Sunland is approached by Sipacore Inc., which offers to make RecRobo for $70 per unit or $1,400,000. Using incremental analysis, determine whether Sunland should accept this offer under each of the following independent assumptions: (1) Assume that $300,000 of the fixed overhead cost is avoidable. (If an amount reduces the net income then enter with a negative sign 15.000-thonic 1150001 14/hilltowaaks monsible imaland fore
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If answered within 40mins ,it would be helpful.I ll surely upvote. Assume that the motor manufacturer produces two types of drill motors (A-1 and A-2), and three types of saw motors(M-1, M-2, M-3). To setup the production line it would cost $12,000 for the drill motors and $8,000 for the new saw motors. The production capacity is 10,000 motors per period. Based on the information below determine the production quantity that should be planned for The M-3 type of saw motors only. Type Demand/Period Conversion Factor Initial Inventory Safety Stock A-1 3,000 1.10 100 40 A-2 2,000 0.95 200 20 M-1 1,000 1.15 100 20 M-2 4,000 1.05 500 50 M-3 2,500 0.90 100 30
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Use the 5-Step Decision Making Process to evaluate the following decision: St. Augustine Bicycles has been manufacturing its own wheels for its bikes. The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cost. The direct materials and direct labor cost per unit to make the wheels are $3.00 and $3.60 respectively. Normal production is 200,000 wheels per year. A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products. Prepare an incremental analysis for the decision to make or buy the wheels. Should St. Augustine Bicycles buy the wheels from the outside supplier? Clearly identify and label each step. Justify your answer.
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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.
Assume you have developed and tested a prototype electronic product and are about to start your new business. You have purchase pre-programmed computer chips at RM80 per unit. Other component cost includes: plastic casings at RM20 per unit and assembly hardware at RM5 per unit. Direct labour costs are RM15 per hour and 3 units can be produced per hour. You intend tosell each unit at a 50% mark-up over the total costs of producing each unit. The plan is to produce 500 units per months in October, November and December. Sales are expected to be: 200 units in October, 400 units in November and 800 units in December. a.Calculate the amount of sales revenue expected in each month and for the first quarter of the year. b.Prepare a cost of good sold schedule for each of the three months and for the first quarter of the year. Using your cost of good sold estimates and the sales revenues expected in question (a), calculate the gross earning for October, November and December, as well as for…
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