Would you purchase the machine

Reference no: EM131970500

Question: You are an engineer for a company that manufactures check valves. One stage of the fabrication process requires that two people per shift assemble the valves. Further, since there is only one line it is necessary to operate this line for two shifts. A machine manufacturer has determined that they could fabricate a semi automatic system that would only require one person per line per shift Given the following data should you purchase the new system? Initial cost of the machine = $1XX, X00 where XXX = the first 3 digits of your student number. Salvage value after 5 years = $10,000 Annual cost to maintain the machine = $7000 You select the hourly assembler rate and the overhead rate. You calculate the Rate of Return (ROR) = Would you purchase the machine? Why or why not?

Reference no: EM131970500

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