An improvement made to a machine increased its fair value and its production capacity by 25% without extending the machine’s useful life. The cost of the improvement should be.
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An improvement made to a machine increased its fair value and its production capacity by 25% without extending the machine’s useful life. The cost of the improvement should be. Single choice.
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- In trying to decide whether or not to replace a sorting/baling machine in a solid waste recycling operation, an engineer calculated the annual worthvalues for the in-place machine and a challenger. On the basis of these costs, the defender should be replaced:a. now.b. 1 year from now.c. 2 years from now.d. 3 years from now.A mechanical engineer is considering two robots for improving materials handling in the production of rigid shaft couplings that mate dissimilar drive components. Robot X has a first cost of $84,000, an annual maintenance and operation (M&O) cost of $31,000, a $40,000 salvage value, and will improve net revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, a $47,000 salvage value, and will increase net revenues by $119,000 per year. Which one should be selected on the basis of a rate of return analysis if the company’s MARR is 15% per year? Use a three-year study period.the purchase of a machine bought last year AND used in the production process is called:a) Opportunity cost b) incremental cost c) sunk cost d) relevant cost
- The selling price of a component is 1.3 Riyal with a material cost of 0.6 Riyal. The cost of the machine used to manufacture the component is15000 Riyals. The present production volume is 22000 units. Determine the breakeven quantity, if the cost of the component is 1.5 Riyal from outside supplier. Due to modification in the component design, the material cost is reduced to 0.50 riyal with additional machine cost of 4000 Riyals and increased production quantity to 30000. Guide the manger to select appropriate product for maximum profit based on profit, break-even analysis and justify the (selection.Benny Co Electric Enterprise, with a MARR of 10%, plans to install one of 3 rewinding machines (X, Y or Z) that provide equivalent service/same benefits). Doing nothing is not an option. The machines have zero(0) salvage values at the end of their lives. The machines are expected to have the same annual operating and maintenance (O&M) costs, although their initial costs and service lives differ, as follows:CleanTech manufactures equipment to mitigate the environmental effects of waste. (a) If Product A has fixed expenses of $15,000 per year and each unit of product has a $0.20 variable cost, and Product B has fixed expenses of $5000 per year and a $0.50 variable cost, at what number of units of annual production will A have the same overall cost as B? (b) As a manager at CleanTech what other data would you need to evaluate these two products?
- Bonita company has a factory machine with a book value of $152,000 and a remaining useful life of 4years. A new machine is available at a cost of 252000 this Mach will have 4year useful life with no salvage value. The new machine will lower annual variable manufacturing cost from $600,000 to $503,000 Prepare an analysis that shows whether bonita should retain or replace the old machine. Keep equipment replace equipment net income increase (decrease) Variable cost New machine costHi please give step by step instructions to figure out the problem and give me an answer to see if I'm right... Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $601,200 and has $352,900 of accumulated depreciation to date, with a new machine that costs $483,900. The old machine could be sold for $64,300. The annual variable production costs associated with the old machine are estimated to be $156,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $101,700 per year for eight years. a. Prepare a differential analysis dated October 3, to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) October 3 Continue with Old Machine (Alternative 1) Replace Old…Searching for ways to cut costs and increase profit, one of the industrial engineers at Home Comfort Furniture Manufacturers, Inc. determined that the equivalent annual worth of an existing machine over its remaining useful life of 2 years is $70,000 per year. The IE also determined that used machines like the one currently in use are not available any longer, but the defender can be replaced with a challenger that is more advanced. It will have an AW of $80,000 if it is kept for 2 years or less, $75,000 if it is kept between 3 and 4 years, and $65,000 if it is kept for 5 to 10 years. If the company uses a specified 3-year planning horizon and an interest rate of 15% per year, determine (a) when the company should replace the machine, and (b) the AW for the next 3 years.
- Assume that management is evaluating the purchase of a new machine as follows: Cost of new machine: $800,000 Residual value: $0 Estimated total income from machine: $300,000 Expected useful life: 5 years The average rate of return of a new equipment is _____.Two currently owned machines are being considered for the production of a part. The capital investment associated with the machines is about the same. The important differences between the machines are their production capacities (production rate × available production hours) and their reject rates (percentage of parts produced that cannot be sold). The material cost is P300.00 per part, and all defect-free parts produced can be sold for P600 each. (Rejected parts have negligible scrap value.) For either machine, the operator cost is P750.00 per hour and the variable overhead rate for traceable costs is P250.00 per hour. Considering the table below: MACHINE A: Production rate: 100 parts/hr Hours available for production: 7hrs/day Percent parts rejected: 10% MACHINE B: Production rate: 130 parts/hr Hours available for production: 6hrs/day Percent parts rejected: 15% What is the profit per day of Machine A? What is the profit per day of Machine B?Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $660,000, an operating cost of $90,000 per year, and a salvage value of $80,000 after its 2-year life. Process W will have a first cost of $1,100,000, an operating cost of $25,000 per year, and a $120,000 salvage value after its 4-year life. Process W will also require updating at the end of year 2 at a cost of $90,000. Which process should be selected on the basis of a present worth analysis at a MARR of 12% per year? The present worth of process T is $− , and the present worth of process W is $− The process selected on the basis of the present worth analysis is process is W or T