Calculate the two missing amounts, Operation Management

Assignment Help:

A company is considering whether to replace a machine. The old machine costs $90,000 and is being depreciated at 10% per annum using the straight line method. It is written down value is no $36,000 and it has a trade in value of $20,000. The new machine would cost $220,000 after it has a trade-in but would double production, all of which could be sold.

The new machine would also be depreciated using the straight line method over ten years. Currently the contribution margin per month is $8000.

a.  What information is relevant to the replacement of the machine?

b.  Do you consider that the machine should be replaced?


Related Discussions:- Calculate the two missing amounts

Explain what will be the company''s return on equity, Midwest packaging's R...

Midwest packaging's ROE last year was only 3%, but its management has developed a new operating plan that calls for a debt-to-asset ratio of 60%, which will result in annual intere

Explain what does the project portfolio illustrate, What does the project p...

What does the project portfolio illustrate? How might it be useful to management?

What are strategies for creating an open environment, 1 Develop an ld score...

1 Develop an ld score for the current layout. What problems can you identify with the current layout? 2. Use trial and error to come up with a better layout that lowers the ld s

Find annual carrying costs, Garden Variety Flower Shop uses 740 clay pots a...

Garden Variety Flower Shop uses 740 clay pots a month. The pots are purchased at $2 each. Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs a

Significance of designing for profit in product development, Discuss the im...

Discuss the importance of designing for profit in product development. What happens when there is distortion in these goals?

Explain the importance of indirect costs, One of the advantages of using a ...

One of the advantages of using a project cost-duration graph is that it keeps the importance of indirect costs in the forefront of decision making (true or false)

Explain the steps involved in conducting a risk, Describe the steps involve...

Describe the steps involved in conducting a risk and opportunity assessment.

Explain contemporary strategy analysis, Ford's (Case 4) challenge in meetin...

Ford's (Case 4) challenge in meeting the needs of shareholders versus stakeholders. What ethical challenges and dilemmas might this pose? How should a corporate strategy be adju

Explain what type of culture is desired, What type of culture is desired by...

What type of culture is desired by Mr. Good¬ night to meet his goals? Discuss.

Explain tangible and intangible strategies, There are tangible and intangib...

There are tangible and intangible strategies that organizations can evaluate their system effectiveness on. Based on Tangible value, Revenue increase, Cost decrease---labour, mater

Write Your Message!

Captcha
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