Calculate the present value of the annual savings when applying the new software during 6 years and
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Calculate the present value of the annual savings when applying the new software during 6 years and 10 years.
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Additional required information: Exhibit 1: Hopworks Beer Production Hopworks Annual Production: Production per Batch: Production Cost w/o Labor: Cellaring and Kegging Labor Cost: Canning and Bottling Labor Cost: Brewing Labor Cost: Topline Revenue: 12,500 BBL 20 BBL (assuming two shifts per day with two batches each at rate of 80 BBL/day [12,500 BBL/156 brew-days in a year]) $60/BBL Investment Cost $10/BBL $20/BBL Conversion: Note: labor costs per batch are fixed regardless of the batch size, so moving to a larger brewing system enables greater economies of scale. However, this is not true for cellaring, kegging, and packaging, which are driven by variable cost/BBL. Brewery Management conversion, etc. Software $300/shift (two batches) $325/BBL 1 BBL (barrel) = 1.17 hectoliters = 117 liters = 247 pints Exhibit 2: Potential Investments Potential Revenue Startup cost: $25K for training, Labor savings of $1/BBL Sales & inventory Ongoing cost: $1000/month Savings or accuracy improvement savings of $2/BBL Additional required information: Exhibit 1: Hopworks Beer Production Hopworks Annual Production: Production per Batch: Production Cost w/o Labor: Cellaring and Kegging Labor Cost: Canning and Bottling Labor Cost: Brewing Labor Cost: Topline Revenue: 12,500 BBL 20 BBL (assuming two shifts per day with two batches each at rate of 80 BBL/day [12,500 BBL/156 brew-days in a year]) $60/BBL Investment Cost $10/BBL $20/BBL Conversion: Note: labor costs per batch are fixed regardless of the batch size, so moving to a larger brewing system enables greater economies of scale. However, this is not true for cellaring, kegging, and packaging, which are driven by variable cost/BBL. Brewery Management conversion, etc. Software $300/shift (two batches) $325/BBL 1 BBL (barrel) = 1.17 hectoliters = 117 liters = 247 pints Exhibit 2: Potential Investments Potential Revenue Startup cost: $25K for training, Labor savings of $1/BBL Sales & inventory Ongoing cost: $1000/month Savings or accuracy improvement savings of $2/BBL
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Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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