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

Consider that you work in the human resources management

Consider that you work in the human resources management department of a local business and that many of your friends work there. Although you don't personally generate payroll checks, you still have the ability to look ...

Assignment project team and stakeholder management -

Assignment: Project Team and Stakeholder Management - Essay Read the project case for this assignment. As the project manager for the District 4 Warehouse Move project, you will need to determine who your stakeholders an ...

1 how do ethics differ from laws2 what role does the five

1. How do ethics differ from laws? 2. What role does the Five Forces Model play in decision making? 3. Why are competitive advantages never permanent?

Material requirements planningproduct a is an end item and

MATERIAL REQUIREMENTS PLANNING Product A is an end item and is made from two units of B and four units of C. B is made of three units of D and two units of E. C Is made of two units of F and two units of E. A has a lead ...

1 identify a familiar product that recently was modified

1. Identify a familiar product that recently was modified, categorize the modification (quality, functional, or aesthetic), and describe how you would have modified it differently. 2. The characteristics of services affe ...

Project management and erppart 1 answer the module review

Project Management and ERP Part 1: Answer the module review questions listed below. 1. What is the role of a project manager and program manager? What are the skills, knowledge, and abilities required to be a project man ...

1 identify at least one technological advancement and one

1. Identify at least one technological advancement and one sociocultural change that have affected you as a consumer. Explain the impact of each on your needs as a customer. 2. Identify an organization in your community ...

The purpose of an assignment is to ensure that the learner

The purpose of an assignment is to ensure that the Learner is able to: - Use methods of enquiry and research in a disciplined field. - Interpret and evaluate text. - Have a sound understanding of key principles and theor ...

Write a paper utilizing apa formatting regarding the

Write a paper utilizing APA formatting regarding the following topic: Explain the Training and HRD process Model ADIE. 1.- The paper must be 4 pages long- not longer, not shorter. 2.- DO NOT USE .COM WEBSITES AS REFERENC ...

Das brick distributors currently employs 1 worker whose job

DAS Brick Distributors currently employs 1 worker whose job is to load bricks on outgoing company trucks. On average, a truck arrives at the loading platform every 20 minutes, according to a Poisson distribution. The wor ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen