Machining Hours for the Production of Baseball Bats Cash Flows and Expected Lives for L1 and L2 Lathe 1 (L1) Lathe 2 (L2) Product Lathe 1 (L1) Lathe 2 (L2) Сapital investment $18,000 per lathe $25,000 per lathe Wood bat 1,600 hr 950 hr 7 years $5,000 per lathe $9,500 per lathe Aluminum bat 1,800 hr 1,100 hr Expected life 11 years Kevlar bat 2,750 hr 2,350 hr Annual Total machining 6,150 hr 4,400 hr expenses hours

EBK ELECTRICAL WIRING RESIDENTIAL
19th Edition
ISBN:9781337516549
Author:Simmons
Publisher:Simmons
Chapter27: Service-entrance Equipment
Section: Chapter Questions
Problem 44R
icon
Related questions
Question

Three models of baseball bats will be manufactured in a new plant in Pulaski. Each bat requires some manufacturing time at either Lathe 1 or Lathe 2, according to the following table. Your task is to help decide which type of lathe to install. Show and explain all work to support your recommendation. The plant will operate 3,000 hours per year. Machine
availability is 85% for Lathe 1 and 90% for Lathe 2. Scrap rates for the two lathes are 5% versus 10% for L1 and L2, respectively. Cash flows and expected lives for the two lathes are given in the following table. Annual operating expenses are based on an assumed operation of 3,000 hours per year, and workers are paid during any idle time of L1 and L2. Upper management has decided that MARR = 18% per year. Solve, a. How many type L1 lathes will be required to meet the machine-hour requirement?
b. What is the CR cost of the required type L2 lathes? c. What is the annual operating expense of the type L2 lathes? d. Which type of lathe should be selected on the basis of lowest total equivalent annual cost?

Machining Hours for the Production
of Baseball Bats
Cash Flows and Expected Lives for L1 and L2
Lathe 1 (L1)
Lathe 2 (L2)
Product
Lathe 1 (L1) Lathe 2 (L2)
Сapital
investment
$18,000 per lathe $25,000 per lathe
Wood bat
1,600 hr
950 hr
7 years
$5,000 per lathe $9,500 per lathe
Aluminum bat
1,800 hr
1,100 hr
Expected life
11 years
Kevlar bat
2,750 hr
2,350 hr
Annual
Total machining
6,150 hr
4,400 hr
expenses
hours
Transcribed Image Text:Machining Hours for the Production of Baseball Bats Cash Flows and Expected Lives for L1 and L2 Lathe 1 (L1) Lathe 2 (L2) Product Lathe 1 (L1) Lathe 2 (L2) Сapital investment $18,000 per lathe $25,000 per lathe Wood bat 1,600 hr 950 hr 7 years $5,000 per lathe $9,500 per lathe Aluminum bat 1,800 hr 1,100 hr Expected life 11 years Kevlar bat 2,750 hr 2,350 hr Annual Total machining 6,150 hr 4,400 hr expenses hours
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Synchronous Generator
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, electrical-engineering and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK ELECTRICAL WIRING RESIDENTIAL
EBK ELECTRICAL WIRING RESIDENTIAL
Electrical Engineering
ISBN:
9781337516549
Author:
Simmons
Publisher:
CENGAGE LEARNING - CONSIGNMENT