Question: 7 Considering the two improvement projects detailed on page 4, CYLINDER HEAD REDESIGN; A. Determine the Cost Benefit of this project: B. Determine the project

7 Considering the two improvement projects detailed on page 4, CYLINDER HEAD REDESIGN; A. Determine the Cost Benefit of this project: B. Determine the project Payback: CYLINDER HEAD REDESIGN COSTS TO IMPLEMENT 1. New head casting tooling; $20k 2. Additional Blanchard table grinder: $35k 3. Modifications to the production area: $15k ANNUAL OPERATION COST SAVINGS 1. Labor; $25K 2. Scrap savings: $3.5k Also there will be proceeds from sale of (2) 8-spindel drills; $5k ADDITIONAL OPERATION COSTS 1. Additional annual grinding wheels costs; $3.5k 2. Table grinder maintenance; $5k every other year

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