Should able plastics buy the removal equipment

Reference no: EM132162947

Question: Able Plastics, an injection-molding firm, has negotiated a contract with a national chain of department stores. Plastic pencil boxes are to be produced for a 2-year period. Able Plastics has never produced the item before and requires all new dies. If the firm invests $67,000 for special removal equipment to unload the completed pencil boxes from the molding machine, one machine operator can be eliminated. This would save $26,000 per year. The removal equipment has no salvage value and is not expected to be used after the 2-year production contract is completed. The equipment, although useless to Able, would be serviceable for about 15 years. What is the payback period? Should Able Plastics buy the removal equipment?

Reference no: EM132162947

Questions Cloud

What is the payback period : A car dealer leases a small computer with software for $5000 per year. As an alternative he could buy the computer for $7000 and lease the software for $3500.

Compare and contrast the three models of culture : Compare and contrast the three (3) models of culture. Next, select one (1) of the researched international competitors.

Give an example of an event in the last few years : Give an example of an event in the last few years where the actions in the event increased our (U.S.A.) GDP number

What is the nominal annual rate of return : A cannery is considering installing an automatic case-sealing machine to replace current hand methods. If they purchase the machine for $3800 in June.

Should able plastics buy the removal equipment : Able Plastics, an injection-molding firm, has negotiated a contract with a national chain of department stores. Plastic pencil boxes are to be produced.

Discuss and analyze the underlying claims : Using news reports within the last three years, find an example of a claim involving one of the torts studied in class.

Discuss health expenditures as a percentage of gdp : Is the Canadian health system sustainable? Discuss health expenditures as a percentage of GDP and as a percentage of provincial budgets over time

Compute the benefit-cost ratio : A project will cost $50,000. The benefits at the end of the first year are estimated to be $10,000, increasing at a 10% uniform rate in subsequent years.

Paper - Reflection The article Building The Vision : Write a 2 page paper indicating a reflection The article Building The Vision authored by James, Collins, and Jerry

User Account

All Pages