Question: Please provide step by step working for each question in details You are the managing engineer for a line that is required to produce 350,0002

 Please provide step by step working for each question in details

Please provide step by step working for each question in details

You are the managing engineer for a line that is required to produce 350,0002 litre milk jugs a week, with each one selling for $0.25. Your current injection molding portion of the line is 25 years old, with a potential value of $5000 in scrap, and there is no remaining book value. It typically takes a team of 4 people a full 108 -hour shifts ( 2 per day) to meet this production target, given the rate of break downs and rejected parts. The current injection molders require $5000 / week in power, labour is $7360 / week, raw materials are $6500/ week, with an additional cost of $950/ week spent on rejected parts. You are trying to convince the Chief Financial Officer that you would like to upgrade the injection molding system to a newer model with automation to reduce rejections to zero, more energy efficient heating/cooling systems, and faster production time as a result. The new machine would cost $450, 000 , but would reduce labour costs by half, power costs to $3500/ week, and raw materials to $4750 / week. The plant has a CCA rate of 35%, a tax rate of 40%, and a MARR of 10% a) Fill in all of the appropriate sub-headings on the following page ( 2 points) b) Construct the income and cash flow statement for the final year of the existing machine in which it is sold, including any disposal effects. ( 3 points) c) Construct the year 0 and year 1 income and cash flow statements for the new machine ( 5 points) d) If you were going to borrow $400000 of the new machine's initial cost with an interest rate of 5%, a loan period of 5 years with single end of year payments, given the details below (table 1 ), add this to the proper place years 0 and 1 statements in the proper place (you don't need to recalculate the net income or cash flow). (2 points) e) If your economic evaluation for a potential piece of equipment predicts negative income tax or disposal effects amounts, how does this impact the company's overall taxes? (2 Points)

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