A warchouse manager is evaluating 2 different robotic systems to be installed in his warehouse. Using the present worth analysis, determine which is the economically better system if MARR is 12% per year compounded monthly. Justify your answer. Initial cost, RM Maintenance cost, RM per month Semi-annual maintenance cost, RM per 6-month Salvage value after 5 years, RM System A System B - 40,000 - 60,000 - 5,000 - 13,000 8,000 10,000

A warchouse manager is evaluating 2 different robotic systems to be installed in his warehouse. Using the present worth analysis, determine which is the economically better system if MARR is 12% per year compounded monthly. Justify your answer. Initial cost, RM Maintenance cost, RM per month Semi-annual maintenance cost, RM per 6-month Salvage value after 5 years, RM System A System B - 40,000 - 60,000 - 5,000 - 13,000 8,000 10,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 16E: Covington Pharmacies has decided to automate its insurance claims process. Two networked computer...

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Covington Pharmacies has decided to automate its insurance claims process. Two networked computer systems are being considered. The systems have an expected life of two years. The net cash flows associated with the systems are as follows. The cash benefits represent the savings created by switching from a manual to an automated system. The companys cost of capital is 10 percent. Required: 1. Compute the NPV and the IRR for each investment. 2. Show that the project with the larger NPV is the correct choice for the company.
A manufacturing company is trying to decide between the two machines shown below. Determine which machine should be selected on the basis of rate of return. Assume the MARR is 20% per year. Machine A Machine B Initial Cost, $ -18,000 -35,000 Annual operating cost, $/year -4,000 -3,600 Salvage value, $ 1,000 2,700 Life, years 3 6
PARC Co. has asked you to recommend a new nutcracker machine. After months of hard research, you have collected the following data: Data Life, Years First Cost (FC) Benefit, Yearly (AB) Benefit Gradient (ABG) O&M cost Gradient (M&OG) O&M Cost uniform annual Salvage Value O 21 years O 12 years O 18 years KRAX 6 O 24 years $202,000 73,000 1,200 600 18,000 42,000 SPLIT-NUT 9 $285,000 88,000 PARC Co. assumes MARR = 15%. Using the Net Present Worth (NPW) analysis: The analysis period if you are going to use NPW is close to: 1,300 1,100 34,000 48,000
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Use the following for the next 2 questions: A facility is to be built with construction costs of $50 per square foot amortized over 20 years. Receiving and put-away costs are expected to be $0.02 per box and pick-pack-ship costs are expected to be $0.10 per box. The facility will have an annual upkeep and maintenance cost of $5 per square foot. 1. If the company constructs a 100,000 square foot facility, what is the monthly fixed cost? - $102.500 - $62,500 - $92,500 - $112,500 - $82,500 - $52,500 - $72,500 2. If demand in April is 30,000 boxes, what is the variable cost in April? (assume the number of boxes received in April equals the number of boxes shipped in April) - $3,000 - $1,200 - $3,600 - $2,400 - $600 - $4,200
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