Business, 12.04.2021 23:10, goodkida7

A car manufacturing company is planning to expand its manufacturing capacity and its demand by adding a new technology. Technology A costs $10,000,000 to purchase and has a maintenance cost of $30 per new customer and operating cost of $25 per unit produced, both paid at the end of the year. Technology B costs $15,000,000 to purchase and its maintenance and operation cost will not depend on the number of users or production. The maintenance cost for this technology is expected to be $65,000 monthly (payable at the end of each month) and operating cost of $50,000 annually payable at the end of each year. The demand for this company is seasonal. In Spring, they are expected to have an average of 5000 customers, followed by Summer with an average demand of 4000, Fall with an average demand of 2000 and Winter with an average demand of 500. This demand is expected to increase by 5% every year. Salvage value for technology A is $0 and technology A has a lifetime of 5 years. Salvage value for technology B is $1,000,000 and technology B has a lifetime of 10 years. Interest rate is 7% per year compounded monthly. a) Draw the cash-flow diagram for alternatives A and B. [5 points) I
b) What is the present worth of both technologies? Which technology do you recommend and why?

Answers: 3

Show answers

Other questions on the subject: Business

Business, 21.06.2019 20:30, cajunldy2001

Elizabeth believes her company has discriminated against her because her minority coworkers, who are less qualified, have been promoted ahead of her. which agency should elizabeth contact? - national alliance of business- affirmative action council- equal employment opportunity commission- federal trade commission- fair employment practices agency

Answers: 2

continue

Business, 22.06.2019 02:50, dreyes439

Grey company holds an overdue note receivable of $800,000 plus recorded accrued interest of $64,000. the effective interest rate is 8%. as the result of a court-imposed settlement on december 31, year 3, grey agreed to the following restructuring arrangement: reduced the principal obligation to $600,000.forgave the $64,000 accrued interest. extended the maturity date to december 31, year 5.annual interest of $40,000 is to be paid to grey on december 31, year 4 and year 5. the present value of the interest and principal payments to be received by grey company discounted for two years at 8% is $585,734. grey does not elect the fair value option for reporting the debt modification. on december 31, year 3, grey would recognize a valuation allowance for impaired loans of

Answers: 3

continue

Business, 22.06.2019 05:40, Jenan25

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?

Answers: 1

continue

Business, 22.06.2019 07:30, natebarr17

Select the correct answer. sarah works in a coffee house where she is responsible for keying in customer orders. a customer orders snacks and coffee, but later, cancels th snacks, saying she wants only coffee. at the end of the day, sarah finds that there is a mismatch in the snack items ordered. which term suggest data has been violated? a. security b. integrity c. adding d. reliability e. reporting

Answers: 3

continue

Do you know the correct answer?

A car manufacturing company is planning to expand its manufacturing capacity and its demand by addin...