Reference no: EM13720747
Firm A is considering replacing an old machine it purchased 4 years ago. At the time, the machine cost $200,000, with an estimated life of 9 years. Straight line depreciation. Salvage value = $20,000. The selling price is estimated to be $10,000 at the end of its life.
Can sell this machine today for $80,000
When the old machine was put into use 4 years ago, it required an increase in NWC of $8,000. The $8,000 will be recovered when the old machine is sold.
Operating Cost: Fixed costs are $24,000 year; annual production is 1000 units of TV, unit price is $300, gross profit margin ((R-VC)/R) is 40%
The new machine that the firm is considering costs $200,000 and would have a useful life of 5 years. Straight-line depreciation. Estimated salvage value of $50,000, which will equal the selling price at that time. Estimated salvage value of $50,000, which will equal the selling price at that time. Using the new machine requires an investment in NWC of $20,000. The $20,000 will be recovered when the new machine is sold.
Operating CF: Installing the new machine would lower fixed costs to $12,000 per year; annual production will increase by 20% while unit price and gross margin stays the same
Information for the firm: Tax rate=40 %, r=10%
What is the change in Operating cost if the firm decides to replace it's old equipment?
Assignment on an operations plan for a company
: Create an operations plan for my company using SAMPLE Operations Plan Preparation Form. Extract appropriate information from the NAB Company portfolio, where applicable. Other required items in the template should be filled in using your personal ..
|
How did romes contact with the hellenistic world
: How did Rome's contact with the Hellenistic world affect Roman civilization in the second and third centuries B.C.E.? Provide specific examples of art, architecture, literature, religion, and philosophy.
|
What are major types of customers catherine serves
: What are the three major types of customers Catherine serves? How do they differ from one another? What do you think the order winners are for each group?
|
How sas used organizational strategy to drive hrm practices
: Consider how SAS used organizational strategy to drive HRM practices. What are they doing that is different than most others? How and why did SAS do what they did?
|
What is the change in operating cost
: Firm A is considering replacing an old machine it purchased 4 years ago. At the time, the machine cost $200,000, with an estimated life of 9 years. Straight line depreciation. Salvage value = $20,000. The selling price is estimated to be $10,000 at t..
|
Types of legal and ethical problems
: Chuck House was the Facilities Director at the headquarters of Hospital Corporation of America (HCA) for 25 years before taking early retirement in 2012.
|
What constant rate does owner believe that profits will grow
: You’ve recently learned that the company where you work is being sold for $380,000. The company’s income statement indicates current profits of $15,000, which have yet to be paid out as dividends. Assuming the company will remain a “going concern” in..
|
Analyze company layout based on study
: How is the facility arranged? you should gather different photos for your company layout such as: office, warehouse, retail layout etc. and analyze their layout based on what we learnt in class.
|
Compute the bond''s expected rate of return
: You own a 20-year,$1,000 par value bond paying 7.5 percent interest annually. The market price of the bond is $825, and your required rate of return is 11 percent. Compute the bond's expected rate of return.
|