A carpet manufacturer, whose discount rate is 10%, can purchase texturizingequipment for $1,250,000 to process yarn. Incremental income before straight linedepreciation from sales of texturized carpets is projected over the next five years as$95,000, $165,000, $357,000, $725,000 and $315,000, respectively. The companybelieves that the fashion will pass and demand in Year 6 will all but disappear. Themachine can be sold at the end of Year 5 for $250,000. What should you advise thecompany to do?Select one:O A. Purchase the equipment as ARR is 10.9%.O B. Not purchase the equipment as the ARR is only 9.3%.O C. Not purchase the equipment as NPV is ($54,784).O D. Purchase the equipment as both the NPV and ARR are negative.O E. Purchase the equipment as NPV is $86,952.O

Here, the decision is required to purchase the equipment, I would use NPV or net present value…

Answered: A carpet manufacturer, whose discount…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

You are the marketing director for a minor league baseball team, and (not unlike a certain major league baseball team in this city) you are interested in ways to increase attendance.You think that attendance is likely driven by several factors, including how competitive the team is, the weather, and certain price promotions which are offered periodically throughout the season (e.g., ‘Buck Night’, where all parking, hot dogs and soft drinks are only $1). Based on data from several prior seasons, you estimate the following regression model for attendance: attend= 1000 + 10,000 win% + 1500 sun + 1200 sun*promo where, attend = attendance in number or patronswin% = team’s winning percentage (a measure of how competitive they are)sun = 1 if the weather is sunny, 0 elsepromo = 1 if the game offered a price promotion, 0 else. a) Draw a graph of the relationship between attendance and the team’s winning percentage, for the case when there is a price promotion on a sunny night. Also, graph…
Please read below scenario in which a consumer explains how she made purchasing decision for a car. First of all, I decided on the price and security features of car. Then, I determined my criteria about other features such as the oil amount consumed per 100 km, diesel or gasoline and so on. When I searched for information on the Internet, I felt that Brand X can offer me favorable alternatives. I visited one of the showrooms of Brand X. I loved this red car and purchased it. Please select the name of Hierarchy of Effects that the consumer likely used. a) The Standard Learning Hierarchy b) The Low-Involvement Hierarchy c) The Experiential Hierarchy d) All the above
You are given the following information about the sales and inventory levels for your company for the last five years. Using regression analysis, determine what the level of safety stocks for your company appears to be. Year 1 2 3 4 5 Inventory $5,112,930 $5,921,310 $6,447,375 $7,355,880 $43,281,300 $8,067,195 Sales $23,586,200 $28,975,400 $32.482.500 $38,539,200 O $1.525,000 $1,475,000 O $1,500,000 O $1,550,000 O $1,575,000
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $169,000. Variable processing costs are estimated to be $9 per book. The publisher plans to sell single-user access to the book for $42. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand -4,000-6p, where p is the price of the e-book. (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars). s (b) Use Goal Seek to calculate the price (in dollars) that results in breakeven. (Round your answer to the nearest cent.) (c) Use a data table that varies price…
Pepsi AM (1980) is a products that failed when they were introduced to the market. Research on it and present a report.
The buyer for men’s furnishings is planning a 16% reduction in sales for the department. If last year’s sales were $1,420,500, what is this year’s planned sales figure? Round to the nearest dollar.
Market simulation report about new carbon fiber 3D printing bicycle company (New Move) with marketing theory(Ansoff matrix, porter generic theory, porter 5 force)
Outlet All Sales Tortilla Sales Madre's Tortilla Stocked Padre's Tortilla Stocked Store 1 $100,000 $1,000 Yes Yes Store 2 $75,000 $500 Yes Yes Store 3 $50,000 $300 Yes No Store 4 $40,000 $400 No Yes Weighted Distribution or Product Category Value (PCV) Distribution (%) Numerical 4: The marketers at Madre's Tortillas want to know the Product Category Value or Weighted Distribution (%) of their distribution network. How much is it?FOR THIS QUESTION PLEASE REFER TO 3rdTABLE
(A forward buying problem) A major pharmaceutical wholesaler buys brand drugs from a manufacturer at wholesale prices and sells them to pharmacies at retail prices. It estimates that the wholesale (W) price, the retail (R) priceand pharmacy sales for a blockbuster drug follow this trend: Month 1 2 3 4 5 6 W price($/unit) 40 45 55 60 65 70 R price($/unit) 80 90 110 120 130 140 Demand (in units) 20 million 30 million 45 million 60 million 75 million 95 million The inventory carrying cost for one unit for one month is $2. Assume enough storage capacity and zero initial inventory, how should the wholesaler take advantage of the price and demand fluctuation to maximize its profit?
Exclusive Footwear Ltd experiencing profit declining in recent times... In the light of the above research, suggest a list of variables (e.g. IV, DV, or MV), develop conceptual model, and discuss their nature and potential relation to each other with proper justification. Develop relevant hypothesis for the variables.
You have been given sales data for TOMMY's Fall/Winter/Spring/Fall New Collection for the last 4 years (16 periods). Forecast sales figures for the next year 2022 (periods 17 to 20). Season Winter Spring Summer Fall 2018 108 95 120 80 2019 100 96 117 79 2020 101 94 117 77 2021 110 87 120 75
You are the manager of World Wide Athlete, a chain of six sporting goods shops in your area. The shops sell 10 racing bikes per week at a retail price of $649.99. Recently, you put the bikes on sale at $599.99. At the sale price, 13 bikes were sold during the one week sale.What was your markdown percent on the bikes? (Round your answer to one decimal place.)What is the percent increase in number of bikes sold during the sale?How much more revenue (in $) would be earned in 6 months by permanently selling the bikes at the lower price rather than having a 1 week sale each month? (6 sale weeks in 26 weeks.)$ more revenue

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS