5-34 Javier is an IE at Lobos Manufacturing. He has been studying process line G to...
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5-34 Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated system would be preferred to the existing labor- intensive system. If Lobos wants to earn at least 20% and uses a 15-year planning horizon, which alterna- tive is preferred? Contributed by Paul R. McCright, University of South Florida Initial cost Installation cost First-year O&M 000, Annual increase First-year labor costs Annual increase Salvage value (EOY15) Labor Intensive $0 0 2,000 450 72,000 5% 2,500 Automated $110,000 18,500 4,800 950 47,500 5% 20,000 5-34 Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated system would be preferred to the existing labor- intensive system. If Lobos wants to earn at least 20% and uses a 15-year planning horizon, which alterna- tive is preferred? Contributed by Paul R. McCright, University of South Florida Initial cost Installation cost First-year O&M 000, Annual increase First-year labor costs Annual increase Salvage value (EOY15) Labor Intensive $0 0 2,000 450 72,000 5% 2,500 Automated $110,000 18,500 4,800 950 47,500 5% 20,000
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Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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