Follow the video Entitled HW 10 Cost Justification to complete this assignment You, as a manufacturing...

  

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Follow the video Entitled "HW 10 Cost Justification to complete this assignment You, as a manufacturing engineer, are dealing with a machine which gives you a lot of problem. You have decided to prepare a cost justification project to seek for the company to secure a new machine. In the beginning, you have found the facts of existing situation as follows. The old Bridgeport machine is 15 years old, no salvage value remain at this point for the machine. The machine has a lot of break down period and maintenance needs. The estimated cost is about $15,000 per year. 3 The machine still could be used when it is running fine and produce approximately $40,000 revenue of the products. Now, you have identify a new machine from Fadal company with similar capability of the old machine. You also find the facts as follows: The machine costs $125,500 for now The machine will be expected a maintenance cost of $5,000 per year. The machine has more up time and could produce an approximately revenue of $70,000 per year. You are conducting a cost justification of this machine. Some further information is as follows: You are using a 7 years as a indicator of the project The vendor suggests a $20,000 salvage value of the new machine at the end of 7th year. The company's MARR (minima attractive rate of return) is 20%. Complete the following suggested procedure: Draw a cash flow for the existing cost situation for next 7 years, simplify the cash flow. Draw a cash flow for the cost situation if buying the new machine for next 7 years, simplify the cash flow. Subtract cash flow chart # 2 - cash flow chart #1 to have a cost justification cash flow #3, simply it as needed. Based on cash flow #3, use present worth (PW) method to evaluate the cost justification project. Define the project's PW value. Followed, would you suggest your boss to buy the Fadal machine to replace the old Bridgeport machine? Follow the video Entitled "HW 10 Cost Justification to complete this assignment You, as a manufacturing engineer, are dealing with a machine which gives you a lot of problem. You have decided to prepare a cost justification project to seek for the company to secure a new machine. In the beginning, you have found the facts of existing situation as follows. The old Bridgeport machine is 15 years old, no salvage value remain at this point for the machine. The machine has a lot of break down period and maintenance needs. The estimated cost is about $15,000 per year. 3 The machine still could be used when it is running fine and produce approximately $40,000 revenue of the products. Now, you have identify a new machine from Fadal company with similar capability of the old machine. You also find the facts as follows: The machine costs $125,500 for now The machine will be expected a maintenance cost of $5,000 per year. The machine has more up time and could produce an approximately revenue of $70,000 per year. You are conducting a cost justification of this machine. Some further information is as follows: You are using a 7 years as a indicator of the project The vendor suggests a $20,000 salvage value of the new machine at the end of 7th year. The company's MARR (minima attractive rate of return) is 20%. Complete the following suggested procedure: Draw a cash flow for the existing cost situation for next 7 years, simplify the cash flow. Draw a cash flow for the cost situation if buying the new machine for next 7 years, simplify the cash flow. Subtract cash flow chart # 2 - cash flow chart #1 to have a cost justification cash flow #3, simply it as needed. Based on cash flow #3, use present worth (PW) method to evaluate the cost justification project. Define the project's PW value. Followed, would you suggest your boss to buy the Fadal machine to replace the old Bridgeport machine?

Answer rating: 100% (QA)

To answer the questions and perform the cost justification analysis well follow the suggested procedure step by step Draw a cash flow for the existing ... View the full answer