What is the maximum amount you should invest in an upgrade

Reference no: EM131044963

Your company has two manufacturing sites that produce electronic components. One has a scrap rate of 12% of the 10,000 manufactured per year. The other plant has a scrap rate of 5% of the 7500 manufactured per year. A product quality audit reveals that the semiautomated pick-and-place machine (vs. the fully automated machine) is contributing to these scrap rate differentials. It costs $20 for each scrapped component. Ignoring depreciation and assuming that the machine has a life of 5 years, what is the maximum amount you should invest in an upgrade to the semiautomatic machine? Assume production levels will remain constant.

Reference no: EM131044963

Questions Cloud

Alternate to represent the department at a conference : Three research department have 7,6,9 members, respectively. Each department is to select a delegates and an alternate to represent the department at a conference. In how many ways can this be done?

The balance sheet of a us company : An analyst is evaluating the balance sheet of a US company that uses last in, first out (LIFO) accounting for inventory. Th e analyst collects the following data:

What is the variance of a portfolio invested : Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .65 .11 .19 .37 Bust .35 .12 .06 −.05 a. What is the expected return on an equally weighted portfolio of these three stocks? b. What is the v..

Draw at least one graph to represent the data : F. Draw at least one graph to represent the data G. Interpret the findings:

What is the maximum amount you should invest in an upgrade : It costs $20 for each scrapped component. Ignoring depreciation and assuming that the machine has a life of 5 years, what is the maximum amount you should invest in an upgrade to the semiautomatic machine? Assume production levels will remain cons..

How the market is valuing this company now : Suppose you are using the Justified P/E approach to value a company. The current P/E ratio is $7. If the expected retention ratio for this company is 55%, the growth rate is 5% and the required return is 15%, what is the justified forward and justifi..

Calculate the offer price and total amount the firm : Nano Manufacturing wants to issue 2 million new shares. It has 4 million shares outstanding, which its investment banking firm estimates $65 million. If the investment banking firm charges a 4% spread, calculate the offer price and total amount ($) t..

What original source of these electrons in photosynthesis : Duchenne muscular dystrophy (MD) is inherited from an X-linked recessive allele. What is the probability that a son with Duchenne MD inherited this disease from his biological father?

What is the total payment due for year three of this loan : Billingsley, Inc. is borrowing $60,000 for five years at an APR of 8 percent. The principal is to be repaid in equal annual payments over the life of the loan with interest paid annually. Payments will be made at the end of each year. What is the tot..

User Account

All Pages