The Toro Company is expanding its El Paso, Texas plastic molding plant as it continues to transfer work from Juarez, Mexico contractors. The plant bought a $1.1 million precision injection molding machine to make plastic parts for Toro lawn mowers, trimmers, and snow blowers. The plant also spent $275,000 for three smaller plastic injection molding machines to make plastic parts for a new line of sprinkler systems. The plant expects to hire 13 people, including some engineers for the expansion. If the average loaded cost (i.e., including benefits) of each employee is $100,000 per year, determine the annual worth of the new systems and employees over a 5-year study period. Use an investment return rate of 10% per year, and assume a 25% salvage value for the new equipment. Solve using factors and a spreadsheet function.
The Toro Company is expanding its El Paso, Texas
plastic molding plant as it continues to transfer
work from Juarez, Mexico contractors. The plant
bought a $1.1 million precision injection molding
machine to make plastic parts for Toro lawn mowers,
trimmers, and snow blowers. The plant also
spent $275,000 for three smaller plastic injection
molding machines to make plastic parts for a new
line of sprinkler systems. The plant expects to hire
13 people, including some engineers for the expansion.
If the average loaded cost (i.e., including
benefits) of each employee is $100,000 per year,
determine the annual worth of the new systems
and employees over a 5-year study period. Use an
investment return rate of 10% per year, and assume
a 25% salvage value for the new equipment. Solve
using factors and a spreadsheet function.
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