Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Project Management Expert

A company is to make the decision on whether or not to buy a machine to package its product and has asked you to review the information and give them with answers to some problems. The machine will cost $200,000. It is wanted to pay it off completely after four year (four annual ends of year payments). The Supplier has offered to finance machine at 4.35%. The machine has the life span of six years and will have insignificant salvage value. Maintenance costs are as follows: Years 1 and 2 $7,500 for each year. Years 3 and 4 $10,000 per year. Years 5 & 6 $15,000 per year. Operational costs will start at the $18,000 per year and rise by 2% per year (compounded). Savings from packaging machine are approximated to be $0.40 per package with the annual volume estimated between the high of 200,000 and low of 150,000. Do a year-by-year analysis and answer the following problems. The Company had many other projects planned which will provide a MARR of 10%.

a) Will the machine cost the company money or create the company money in first 2 years supposing the high estimate of production? How much?

b) At the end of 4 years will the machine have made or lost the company money? How much? (Compute for both best and worst case scenarios).

c) What is the profit or loss for machine over its lifetime supposing a best-case scenario? Supposing a worst-case scenario?

d) What is minimum production level required to make the purchase feasible (breakeven)? To make it past the MARR?

e) If the saving on machine drops to $0.35 per package what occurs to our numbers?

f) Based upon the information accessible would you suggest purchase of this machine? Describe your reasoning.

Project Management, Management Studies

  • Category:- Project Management
  • Reference No.:- M915084

Have any Question? 


Related Questions in Project Management

Paper-the term paper should be 6-8 pages and turned in on

Paper:- The Term Paper should be 6-8 pages and turned in on safe assign. If you have graphs or pictures it should run longer. Double space using Ariel font 12 pt with normal or narrow margins. List your sources in a form ...

1 why can the process of commercialization take a

1. Why can the process of commercialization take a considerable amount of time? 2. What is product differentiation, and how can it be achieved? 3. Explain how the term quality has been used to differentiate products in t ...

Loan project buying a house for this assignment you will

Loan Project: Buying a House For this assignment, you will analyze a home mortgage loan. 1. Find a description, asking price, and real estate taxes of a house for sale, and decide on a purchase price you would be willing ...

Investigate building your own home networkbuild your own

INVESTIGATE BUILDING YOUR OWN HOME NETWORK Build your own home network on paper. Assume you have the computers already and just need to link them together. Find prices for switches and routers on the Web. Also research E ...

Planning strategic planning - concluding thoughtswrite in

Planning : Strategic Planning - Concluding Thoughts Write in APA STYLE in 5 PAGES. and also include references. In developing this assignment, you have an opportunity to synthesize and apply the concepts, principles, and ...

Daynamic how to measure success and sustain the gainmiddle

Daynamic :How to Measure Success and Sustain the Gain Middle East Company - Write in APA Style in 4 PAGES. Choose an organization at which you are currently working or a Middle Eastern organization with which you are fam ...

Wite the given paper in proper englishassignment

Write the given paper in proper english. Assignment : Inappropriate Behavior Marwan has worked at Studio Five Theme Park as a character actor portraying a swash-buckling pirate. He does not have an employment contract. H ...

Create a multi-level work breakdown structurethis

Create a multi-level work breakdown structure This assignment consists of two parts: a project schedule, and a written response. You must submit both parts as separate files for the completion of this assignment. Label e ...

1 what is a line extension and how does it differ from a

1. What is a line extension, and how does it differ from a product modification? 2. Compare and contrast the three major approaches to modifying a product. 3. Identify and briefly explain the seven major phases of the ne ...

Use the project you have been working on in units iii and

Use the project you have been working on in Units III and VI to conduct a preliminary risk analysis of your project. Please use a qualitative and a quantitative technique to evaluate project risk. The total assignment is ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro