A light manufacturing Co. plans to develop a new machine for its production lines. The most likely

estimated cost of project itself is $1000,000, but the most optimistic estimate is 900,000 while the

pessimistic estimate is $1,200,000. If a project itself plus the implementation costs exceed

1.450,000, the project will not meet the companys Net present value (NPV) hurdle. There are

four costs involved in adding the prospective new machine to the production line:

1). Engineering Labor Cost

2). Non-engineering Labor Cost

3). Assorted Material Cost

4). Production line Down-time Cost.

The Engineering Labor requirement is estimated to be 600 hours plus (or minus) 15%, at a cost

of $80 per hour. The non-engineering labor requirement is estimated to be 1500 hours, with

Maximum of 2200 and a minimum of 1200 hrs at a cost of $35 per hour. Assorted material cost

may run as high as $155,000 or as low as 100,000, but the most likely value is about $135,000.

The best of time lost on the production is estimated to be uniformly distributed between 105

hours, and 120 hours. The line contributes about $500 per hour to the firms profit and overhead.

What is the probability that The new machine project will meet the companys NPV hurdle .

determine the probability that the project cost plus implementation will be below $1,300,00.?