Production line that constantly needs maintenance

Assignment Help Business Economics
Reference no: EM132355060

You supervise an aging production line that constantly needs maintenance and new parts. Last month you spent $25,000 replacing a failed controller. Should the following plan be accepted if the interest rate is 15%? The net installed cost of the new line to replace the old line is $600,000 with a useful life of six years. In the first year its operating cost will be $100,000, and it will generate annual revenues of $300,000. Each year the operating cost will increase by $5,000 and the revenues will fall by $15,000. After six years the equipment will have a value of $100,000 in the next re-building of the line.

Reference no: EM132355060

Questions Cloud

Marginal revenue to find the profit-maximizing output : Do firms really calculate marginal cost and marginal revenue to find the profit-maximizing output?
Demand for electricity and ended up paying : People did reduce their demand for electricity and ended up paying higher prices for it! How could such a thing happen?
What are the reasons why cybersecurity : What are the reasons why cybersecurity breach is not reported by companies?
Calculate er for an entire economy : Calculate Bank One's er (desired excess reserves ratio). (We usually calculate er for an entire economy, but we'll do it this way for now.)
Production line that constantly needs maintenance : You supervise an aging production line that constantly needs maintenance and new parts. Last month you spent $25,000 replacing a failed controller.
Encouragement of prostitution was immoral to begin : If you thought that the brothels' encouragement of prostitution was immoral to begin with, would you consider this pricing plan to be even more immoral?
Federal reserve can use open market operations : Explain how the Federal Reserve can use open market operations, reserve requirement, and fed funds/discount rate policies to resolve an economy
Why do you think it is necessary for managers : Why do you think it is necessary for managers to ignore profit margin (average profit) when making an optimal decision?
How do you compare relevant costs and benefits : What is an example of a bad decision. what is an example of a good decision. How do you compare relevant costs and benefits.

Reviews

Write a Review

Business Economics Questions & Answers

  Q1 a father on the day his son is born wishes to determine

q1. a father on the day his son is born wishes to determine what lump sum amount would have to be paid into an account

  What are the necessary conditions for economic efficiency

What are the necessary conditions for economic efficiency? In what four situations might a market fail to achieve ideal economic efficiency?

  One tuesday the government announces

One Tuesday the government announces two new policies. First, you must pay a head tax (lump sum tax) of $3 a day. Second, the government will subsidize the purchase of apples (but not of oranges) so that the price of an apple falls to 50 cents. Draw ..

  Proposals to reduce patent length for drugs

Proposals to reduce patent length for drugs are sometimes made, but some critics argue that such a change would result in even higher prices during the patent period as companies would need to recover drug development costs more quickly.

  Conflict between efficiency and equity of the ramsey rule

Comment on the conflict between efficiency and equity of the Ramsey rule.

  Common types of federal taxes

1. What are three common types of federal taxes? 2. What are two common types of state taxes?

  Years outside of an rrsp

As she will be in a lower tax bracket. As her financial advisor, which option do you recommend.

  Regulated by the government taxi authority

In Komino City, the taxi industry is regulated by the Government Taxi Authority. A company can only supply taxi services, in Komino City, if it is issued a licence by the Government Taxi Authority. Suppose that the Government Taxi Authority issues on..

  Four main types of measurement scales

We learn in SPSS Chapter Two and in our Textbook that there are four main types of measurement scales

  Saliency on one social identity

What are the effects of multiple group memberships and saliency on one's social identity?

  Determine the irr of building the corrosion resistant tower

Horizon Wireless must rebuild a cell tower recently destroyed by a tornado. If made of normal steel, the tower will cost $40,000 to construct and should last 18 years. Maintenance will cost $1,000 per year. If corrosion resistant steel is used, the t..

  Government savings and the national savings

Private savings, government savings and the national savings of the economy V. Is private saving the same as aggregate investment?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd