company is planned to install new automated plastic molding press.Four different presses are available as follows:Press 1Press 2 Press 3 Press 4Capital Investment $24,000 $30,000 $49,000$52,000Useful Life (year)5555Annual ExpensesPower ($)Labor ($)Maintenance ($)Tax & Insurance ($)2,72026,4001,6004802,72024,0001,8006084,80016,8002,6009924,80014,8002,0001,040Assume that each press has the same output capacity (120,000 units per year) and all unitscan be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earnat least 10%.a) Sketch Cash Flow Diagram for the four choicesb) Which press should be chosen (use Present Worth PW method?

The phenomenon of capital budgeting is used to determine the profitability of a project and helps to…

company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power ($) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 26,400 1,600 480 2,720 4,800 24,000 16,800 1,800 2,600 608 992 4,800 14,800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. a) Sketch Cash Flow Diagram for the four choices b) Which press should be chosen (use Present Worth PW method?

company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power ($) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 26,400 1,600 480 2,720 4,800 24,000 16,800 1,800 2,600 608 992 4,800 14,800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. a) Sketch Cash Flow Diagram for the four choices b) Which press should be chosen (use Present Worth PW method?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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