Lyn Addie,finance manager for Dilly Productions,Inc., has been asked to evaluate a proposal. The operations manager of the assembly division believes that replacing the machinery used in assembly line will produce total benefits of 500000 over the next 3 years. The existing machine would produce benefits of 350000 over that same time period. An initial cash investment of 150 000 would be required to install the new machinery. The manager estimates that the existing machinery can be sold for 50 000 . Determine the following to make a decision: A. The marginal (added) benefits of the proposed machinery. B. The marginal (added) cost of the proposed machinery. C. The net benefit of the proposed new machinery. D. What should Lyn Addie recommend that the company do? Why?
Lyn Addie,finance manager for Dilly Productions,Inc., has been asked to evaluate a proposal. The operations manager of the assembly division believes that replacing the machinery used in assembly line will produce total benefits of 500000 over the next 3 years. The existing machine would produce benefits of 350000 over that same time period. An initial cash investment of 150 000 would be required to install the new machinery. The manager estimates that the existing machinery can be sold for 50 000 . Determine the following to make a decision:
A. The marginal (added) benefits of the proposed machinery.
B. The marginal (added) cost of the proposed machinery.
C. The net benefit of the proposed new machinery.
D. What should Lyn Addie recommend that the company do? Why?
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