Midland Metalworking is examining a 760-tonne hydraulic press and a 600-tonne moulding press for prchase Midiand has enough in its budget for only one of them. IMidland's MARR is 12 percent and the relevant information is as given below, which press should it purchase? Use an annualearh comparisonHydraulic Press$290,000$30,000$3000, increasing by 20% each $1400, increasing by $350 eachyear thereafter20 years$17,750Initial CostAnnual SavingsAnnual Maintenance CostMoulding Press$210,000$22,000LifeSalvage Valueyear thereafter7 years$15,800moulding pressClick the icon to view the table of compound interest factors for discrete compounding penods when i= 12%hydraulic pressThe annual worth for the hydraulic press is S The annual worth of the moulding pross is S Midland should choose the(Round to the nearest cent as needed)

The annual worth is the equivalent uniform annual cost of an asset over its life cycle.

Answered: Lalworking is examining a 750-tonne…

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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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.
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
Tippy Toe Spa Company offers various services, such facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment: Laser Hair Removal Machines Microdermabrasion Machines Facial Oxygen Units $64,500 $27,000 $126,400 $37,800 $91,400 $27,200 11% Cost per Machine Annual Cash Inflow Annual Cash Outflow Required Rate of Return Useful Life Residual Value 4 years $890 $29,700 $212,200 $197,900 14% 3 years $890 Laser Hair Removal Machine: Answer Years Microdermabrasion Machine: Answer Years Facial Oxygen Unit: Answer Years 7% Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer Microdermabrasion…
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Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: 800 units. $ 3,680 $ 1,680 $ 530 $ 493,400 Manufacturing Selling Allocated common costs per year: Manufacturing Selling and administrative $ 73,000 $ 98,000 $ 130,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling products will decrease by $236,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for th company to add the new product line? Complete this question by entering your answers in the tabs below. Required 1…
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Vaughn Chemicals has developed a new window cleaner that requires two ingredients, AM972 and CA38. Based on forecasted sales, Vaughn has developed the following budgeted production for the coming year. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st QuarterNext Year Forecasted production (gallons) 5,000 7,000 9,000 12,500 6,000 Each gallon of window cleaner requires 100 ounces of AM972 and 28 ounces of CA38. An ounce of AM972 costs Vaughn $0.15. An ounce of CA38 costs the company $0.25. Vaughn's inventory policy requires ending inventory equal to 20% of the next quarter's production needs. At the beginning of the year, Vaughn expects to have 80,000 ounces of AM972 and 30,000 ounces of CA38 on hand.Prepare Vaughn's AM972 purchases budget for the coming year. (Enter price per ounce to 2 decimal places, e.g. 0.35.) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual select an opening purchase…
Make or Buy Alternative 12. Your production line uses 10,000 filter housings per week at a cost of $0.85 per unit. Should you start making them yourself? MARR = 12%. Make Buy Capital Expenditure Salvage (after 10 yr) Annual O/M $240K $45K $233K $300K $150K $256K $939K $442K $240K $100K $200K Materials Overhead Labor Maintenance Total $982K

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