One of the investors wanted to buy a factoryfor the production of electrical transformers.It was found that the total fixed cost of theplant was (1,000,000) S of Japanese originand (800,000) S of Korean origin, and the totalvariable costs were calculated to produce(100,000) transformers represented (in theform of raw materials, workers wages andmaintenance) ... ($ 500,000) for the Japaneseplant. And (700,000) dollars for the Koreanlaboratory. If you were assigned to preparea study of the economic feasibility of thelaboratory. Which one do you suggest torecommend to the investor to buy, and onwhat basis is the comparison made? Such asdrawing and analysis.10:13 ✓

he production of electrical transformers as found that the total fixed cost of the t was (1,000,000) S of Japanese origin (800,000) S of Korean origin, and the to able costs were calculated to produce 0,000) transformers represented (in the of raw materials, workers wages and ntenance) ... ($ 500,000) for the Japane t. And (700,000) dollars for the Korean ratory. If you were assigned to prepare udy of the economic feasibility of the ratory. Which one do you suggest to mmend to the investor to buy, and on t basis is the comparison made? Such wing and analysis. 10:1

he production of electrical transformers as found that the total fixed cost of the t was (1,000,000) S of Japanese origin (800,000) S of Korean origin, and the to able costs were calculated to produce 0,000) transformers represented (in the of raw materials, workers wages and ntenance) ... ($ 500,000) for the Japane t. And (700,000) dollars for the Korean ratory. If you were assigned to prepare udy of the economic feasibility of the ratory. Which one do you suggest to mmend to the investor to buy, and on t basis is the comparison made? Such wing and analysis. 10:1

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

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A man is considering investing P500, 000 to open a semi-automatic auto-washing business in a city of 400, 000 population. The equipment can wash, on the average, 12 cars per hour, using two men to operate it andto do small amount of hand work. The man plans to hire two men, inaddition to himself, and operate the station on an 8-hour basis, 6 days perweek, 50 weeks per year. He will pay his employees P25. 00 per hour. Heexpects to charge P25. 00 for a car wash. Out-of-pocket miscellaneouscost would be P8, 500 per month.He would pay his employees for 2 weeks for vacations each year.Because of the length of his lease, he must write off his investment within 5years. His capital now is earning 15%, and he is employed at a steady jobthat pays P25, 000 per month. He desires a rate of return of at least 20% onhis investment. Would you recommend the investment?a) Use ROR methodb) Use Annual Worth methodc) Use present worth methodd) Use future worth methode) Solve for the payback period and the…
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During your first month as an employee at Engro. Industries (a large drill-bit manufacturer),you are asked to evaluate alternatives for producing a newly designed drill bit on a turningmachine. Your boss’ memorandum to you has practically no information about what thealternatives are and what criteria should be used. The same task was posed to a previousemployee who could not finish the analysis, but she has given you the following information:An old turning machine valued at $350,000 exists (in the warehouse) that can be modified forthe new drill bit. The in-house technicians have given an estimate of $40,000 to modify thismachine, and they assure you that they will have the machine ready before the projected startdate (although they have never done any modifications of this type). It is hoped that the oldturning machine will be able to meet production requirements at full capacity. An outsidecompany, Descon Engg. Inc., made the machine seven years ago and can easily do the…
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