Question 2: An item may be bought for a price of $12 a piece. Making it would require buying a machine for $60,000 to be paid now, and running expenses of $5,000 per year to be paid at the end of each year. In addition to these fixed expenses, raw material cost is $5 per piece. What is the maximum annual demand for which buying is better than making? Assume that the vendors get paid at the end of the year. Also, assume that the machine has a useful life of 5 years with a salvage value of 15,000. Use i of 11%.
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- Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here.Problem 1: You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $80 initially, and then $125 per year in maintenance costs. Machine B costs $150 initially, has a life of three years, and requires $100 in annual maintenance costs. Either machine must be replaced at the end of its life with an equivalent machine. Which is the better machine for the firm? The discount rate is 12 percent, and the tax rate is zero.The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit?
- The purchasing price for a dye press is $30,000. It is expected to provide labour cost savings of $5,000 in year 1. The savings are expected to increase linearly by X$ each year for seven years. Find the dollar value of X such that the purchase price is justified by the labour savings at MARR = 5%.The solution is with $1 of which of the following?65.8067.8069.8071.80None of the aboveFlanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.10. The machine will increase fixed costs by $11,500 per year. The information they will use to consider these changes is shown here. A. What will the impact be on the break-even point if Flanders purchases the new machinery? Round per unit cost answers to two decimal places. Current New Machine Units Sold 218,000 fill in the blank 1 Sales Price Per Unit $2.15 $fill in the blank 2 Variable Cost Per Unit $1.75 $fill in the blank 3 Contribution Margin Per Unit $0.40 $fill in the blank 4 Fixed Costs $56,000 $fill in the blank 5 Break-Even (in units) 140,000 fill in the blank 6 Break-Even (in dollars) $301,000 $fill in the blank 7 B. What will the impact be on net operating income if Flanders purchases the new machinery? Current New Machine Sales $468,700 $fill in the blank 8 Variable Costs 381,500 fill in the blank 9 Contribution Margin…A precision lathe costs $11,300 and will cost $26,500 a year to operate and maintain. If the discount rate is 12% and the lathe will last for 4 years, what is the equivalent annual cost of the tool? (Enter your answer as positive value. Round your answer to the nearest cent.) The equivalent annual cost $
- 1.A manager has determined that a potential new product can be sold at a price of 10.00 each. The cost to produce the product is 5.00, but the equipment necessary for production must be leased for 25,000 per year. What is the break-even point? 2.In order to produce a new product, a firm must lease equipment at a cost of 100,000 per year. The managers feel that they can sell 50,000 units per year at a price of 75. What is the highest variable cost that will allow the firm to at least break even on this project? Variable CostNote:- I need only question 3 answer. ASAP 2. A company can manufacture a product using hand tools. Tools will cost $ 1,000, and themanufacturing cost per unit will be $ 1.50. As an alternative, an automated system will cost$15,000 and the manufacturing cost per unit will be $ 0.50. With an anticipated annualvolume of 5,000 units and neglecting interest, the payback period (yr) for the automatedsystem is most nearly (A) 2.8 (B) 3.6(C) 15.0(D) never 3. For problem 2, what is the payback period (yr) taking into account the interest lost on the capital invested if the annual interest rate is 5 % per year?(A) 2.4(B) 2.6(C) 3.3(D)4.5A new project will allow you to sell a new product at $61 each. Variable costs are $24 each and fixed costs would run $75,000 per year. If there is no initial investment required, how many units would you have to sell annually to break-even (aka the "accounting break-even quantity")? (Round up to the next whole number of units.) O a. 1800 O b. 2147 O c. 2287 O d. 1778 Oe. 2028
- If you buy the new machine you will be able to sell the existing machine for $6,000. The new machine will cost $10,000 for delivery and installation, on top of the purchase price. Making your product more quickly is important because you currently cannot meet the demands of your orders. You are currently selling every widget you produce. The machine will cost $100,000 today and will require annual maintenance of $5,000 each year (except for the final year), starting at the end of the first year. You expect that your machine will last for 8 years before you need to purchase the next machine. At that time, you expect you will be able to sell the machine for $7,800. You can buy the machine now and have it delivered and installed by tomorrow. You expect that you will sell 2,000 more widgets in year 1 and that this number will increase by 20% each year for the next 4 years after that before leveling off at that level of sales for the remaining years you own the machine. You can obtain more…FULL QUESTION: Kinky Copies may buy a high-volume copier. The machine costs $100,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000. The firm’s marginal tax rate is 21%, and the discount rate is 8%. (Assume the net working capital will be recovered at the end of Year 5.) What is the NPV of this project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.10. The machine will increase fixed costs by $12,000 per year. The information they will use to consider these changes is shown here. A. What will the impact be on the break-even point if Flanders purchases the new machinery? Round per unit cost answers to two decimal places. Current New Machine Units Sold 221,000 Sales Price Per Unit $2.10 Variable Cost Per Unit $1.70 Contribution Margin Per Unit $0.40 %24 Fixed Costs $60,000 Break-Even (in units) 150,000 Break-Even (in dollars) $315,000 B. What will the impact be on net operating income if Flanders purchases the new machinery? Current New Machine Sales $464,100 Variable Costs 375,700 Contribution Margin $88,400 Fixed Costs 60,000 Net Income (Loss) $28,400 C. What would your recommendation be to Flanders regarding this purchase? a. The new equipment will increase fixed costs substantially but net income will still…