lucing their own headsets in-house. The company estimates that the transition will take place over 12 months. The system is expected to have an eight-year service life and produce savings e table below. se the NPW method to calculate the economic worth of producing the headsets in house. e table for the savings and expenditures of the system. e interest factors for discrete compounding when MARR = 15% per year. ucing the headsets in house is $thousand. (Round to the nearest whole number. X More Info ouse Headset Manufacturing stment Single Payment Compound Present Amount Compound Equal Payment Series Sinking Present Fund Worth Factor Factor Worth Now (building) $500,000 Amount Factor Factor Factor $2,200,000 First year (equipment and Facilities) (P/F, i, N) (F/A, i, N) (A/F, i, N) (F/P, i, N) 1.1500 (P/A, i, N) 0.8896 0.8896 1.0000 1.0000 al savings in materials and $5,000,000 1.3225 0.7561 2.1500 0.4651 1.6257 ty inspection 1.5209 0.6575 3.4725 0.2880 2.2832 $1,500,000 $800,000 1.7490 0.5718 4.9934 0.2003 2.8550 mental annual expenses mental annual income taxes omic service life salvage value 2.0114 0.4972 6.7424 0.1483 3.3522 8 years $1,500,000 2.3131 0.4323 8.7537 0.1142 3.7845 2.6800 0.3759 11.0668 0.0004 4.1604 3.0590 0.3269 13.7288 0.0729 4.4873 3.5179 0.2843 16.7858 0.0596 4.7716 4.0456 0.2472 20.3037 0.0493 5.0188 Print Done WNIZ 2 3 45 6 7 8 9 10 Print Done Capital Recovery Factor (A/P, i, N) 1.1500 0.6151 0.4380 0.3503 0.2983 0.26842 0.2404 0.2229 0.2096 0.1993 -
lucing their own headsets in-house. The company estimates that the transition will take place over 12 months. The system is expected to have an eight-year service life and produce savings e table below. se the NPW method to calculate the economic worth of producing the headsets in house. e table for the savings and expenditures of the system. e interest factors for discrete compounding when MARR = 15% per year. ucing the headsets in house is $thousand. (Round to the nearest whole number. X More Info ouse Headset Manufacturing stment Single Payment Compound Present Amount Compound Equal Payment Series Sinking Present Fund Worth Factor Factor Worth Now (building) $500,000 Amount Factor Factor Factor $2,200,000 First year (equipment and Facilities) (P/F, i, N) (F/A, i, N) (A/F, i, N) (F/P, i, N) 1.1500 (P/A, i, N) 0.8896 0.8896 1.0000 1.0000 al savings in materials and $5,000,000 1.3225 0.7561 2.1500 0.4651 1.6257 ty inspection 1.5209 0.6575 3.4725 0.2880 2.2832 $1,500,000 $800,000 1.7490 0.5718 4.9934 0.2003 2.8550 mental annual expenses mental annual income taxes omic service life salvage value 2.0114 0.4972 6.7424 0.1483 3.3522 8 years $1,500,000 2.3131 0.4323 8.7537 0.1142 3.7845 2.6800 0.3759 11.0668 0.0004 4.1604 3.0590 0.3269 13.7288 0.0729 4.4873 3.5179 0.2843 16.7858 0.0596 4.7716 4.0456 0.2472 20.3037 0.0493 5.0188 Print Done WNIZ 2 3 45 6 7 8 9 10 Print Done Capital Recovery Factor (A/P, i, N) 1.1500 0.6151 0.4380 0.3503 0.2983 0.26842 0.2404 0.2229 0.2096 0.1993 -
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
![FootballComm LLC is a manufacturer of devices for football coaches and their coaching staffs that enables them to quickly and effectively communicate with one another during a game through a wireless sideline headset
system. Currently, the company purchases all of the headsets included in their systems from a China-based supplier, but they have experienced a significant decrease in overall headset quality. To correct the problem, the
company is considering producing their own headsets in-house. The company estimates that the transition will take place over 12 months. The system is expected to have an eight-year service life and produce savings
and expenditures given in the table below.
If the firm's MARR is 15%, use the NPW method to calculate the economic worth of producing the headsets in house.
Click the icon to view the table for the savings and expenditures of the system.
Click the icon to view the interest factors for discrete compounding when MARR = 15% per year.
The economic worth of producing the headsets in house is $ thousand. (Round to the nearest whole number.
- X
More Info
More Info
Single Payment
In-House Headset Manufacturing
Investment
Compound Present
Amount
Factor
Worth
Now (building)
Equal Payment Series
Sinking Present
Fund
Worth
Factor
Factor
(A/F, i, N) (P/A, i, N)
0.8696
$500,000
Compound
Amount
Factor
(F/A, i, N)
1.0000
$2,200,000
(F/P, i, N)
Factor
(P/F, i, N)
0.8896
First year (equipment and
facilities)
1.1500
1.0000
$5,000,000
Annual savings in materials and
quality inspection
1.3225
0.7561
2.1500
0.4651
1.6257
1.5209
0.6575
3.4725
0.2880
2.2832
$1,500,000
Incremental annual expenses
Incremental annual income taxes
$800,000
1.7490
0.5718
4.9934
0.2003
2.8550
Economic service life
2.0114
0.4972
6.7424
0.1483
3.3522
8 years
$1,500,000
Net salvage value
2.3131
0.4323
8.7537
0.1142
3.7845
2.6600
0.3759
11.0668
0.0004
4.1604
3.0590
0.3269
13.7268
0.0729
4.4873
3.5179
0.2843
16.7858
0.0596
4.7716
4.0458
0.2472
20.3037
0.0493
5.0188
Print
Done
N
1
2
3
4
5
6
7
8
9
10
Print
Done
Capital
Recovery
Factor
(A/P, i, N)
1.1500
0.6151
0.4380
0.3503
0.2983
0.2642
0.2404
0.2229
0.2096
0.1993](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc55a2f9-a031-4c31-a808-a3bc74814348%2F0b5307ea-b2a5-4f13-93ed-16654f7590b8%2Fxk6jv6w_processed.png&w=3840&q=75)
Transcribed Image Text:FootballComm LLC is a manufacturer of devices for football coaches and their coaching staffs that enables them to quickly and effectively communicate with one another during a game through a wireless sideline headset
system. Currently, the company purchases all of the headsets included in their systems from a China-based supplier, but they have experienced a significant decrease in overall headset quality. To correct the problem, the
company is considering producing their own headsets in-house. The company estimates that the transition will take place over 12 months. The system is expected to have an eight-year service life and produce savings
and expenditures given in the table below.
If the firm's MARR is 15%, use the NPW method to calculate the economic worth of producing the headsets in house.
Click the icon to view the table for the savings and expenditures of the system.
Click the icon to view the interest factors for discrete compounding when MARR = 15% per year.
The economic worth of producing the headsets in house is $ thousand. (Round to the nearest whole number.
- X
More Info
More Info
Single Payment
In-House Headset Manufacturing
Investment
Compound Present
Amount
Factor
Worth
Now (building)
Equal Payment Series
Sinking Present
Fund
Worth
Factor
Factor
(A/F, i, N) (P/A, i, N)
0.8696
$500,000
Compound
Amount
Factor
(F/A, i, N)
1.0000
$2,200,000
(F/P, i, N)
Factor
(P/F, i, N)
0.8896
First year (equipment and
facilities)
1.1500
1.0000
$5,000,000
Annual savings in materials and
quality inspection
1.3225
0.7561
2.1500
0.4651
1.6257
1.5209
0.6575
3.4725
0.2880
2.2832
$1,500,000
Incremental annual expenses
Incremental annual income taxes
$800,000
1.7490
0.5718
4.9934
0.2003
2.8550
Economic service life
2.0114
0.4972
6.7424
0.1483
3.3522
8 years
$1,500,000
Net salvage value
2.3131
0.4323
8.7537
0.1142
3.7845
2.6600
0.3759
11.0668
0.0004
4.1604
3.0590
0.3269
13.7268
0.0729
4.4873
3.5179
0.2843
16.7858
0.0596
4.7716
4.0458
0.2472
20.3037
0.0493
5.0188
Print
Done
N
1
2
3
4
5
6
7
8
9
10
Print
Done
Capital
Recovery
Factor
(A/P, i, N)
1.1500
0.6151
0.4380
0.3503
0.2983
0.2642
0.2404
0.2229
0.2096
0.1993
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