Please type your work in Microsoft Word. Given that the clew website is not available, assignments are to be collected at the beginning of the class on Wednesday, October 09, 2013. Late assignments are not accepted. This assignment is designed to be individual. Identical assignments will not be graded and automatically assigned a grade of zero. 1. (10 points) You have collected the processing time for five units of Product X at different points in time and the relevant data are shown in the following table: Unit Number Time (Hours) 3 11.25 12 9.05 32 7.02 56 6.1 80 5.2 a. Construct a scatter diagram showing the hours against the unit numbers. Is the relationship between hours and unit numbers linear or …show more content…
Consequently, it has been expanding its manufacturing capacity in North America. Historically, the cost function of expanding its capacity obeys the law of f(y) = kya, where y is measured in # of cars produced each week and f(y) in millions of dollars. a. Given past experience, every doubling of its manufacturing capacity results in an increase in construction cost of 68%. Find the value of a. b. Based on the value of a determined in part a) and a discount rate for future cost of 15%, determine the optimal timing of plant additions. To assist your calculation, the figure depicting the relationship between a and rx is furnished on the last page. c. If a plant size of 4,000 cars per week costs $10 million, find the value of k. d. If the demand for its cars increases at 500,000 cars per year, compute the present cost of adding the next two plants, the first one is added now and the second is added after the optimal number of years calculated in part b. Assume that the plant closes for two weeks for maintenance in July every year and remains open for the rest of the year. Use annual compounding for your calculations. (Hint: Please keep track of units in your calculations). 4. (10 points) Your manager asks you to forecast demand for a popular product ABC in your firm. She has provided you with the following historical demand data for the first six months in 2013 (Assume that you are at the end of June 2013) and would like you
Fred was an engineer hired by the company to design a new plant to manufacture a paint remover. The budgets of the design that Fred has been
The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &
10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
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* The variances are due to the Mile High Cycle company not forecasting for increased production. The company budgeted for the production of 10,000 cycles but the actual production was 10,800 units. When the company increased production, the production efficiency decreased. The company had to use or rework parts that added extra cost to the expenses; the reworked parts added $25,000 of extra expenses to the wheel assembly production and $45,000 to the final assembly process. The material,
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3. If the load factor could be increased to 75 percent, how many passenger train cars must be operated to earn pre-tax income of $
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"e. What is each project's MIRR at a cost of capital of 12%? At r = 18%? (Hint: Consider Period 7 as the end of
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a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?
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value equal to the initial investment. In this case, which rate should be used for
Use the information for the question(s) below. The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years. The cost of the machine is $30,000 and the machine will be