1. Semiconductor manufacturing involves taking a flat disc of silicon, called a wafer, and depositing many layers of material on top of it. Each layer has a pattern on it that, upon completion, defines the electrical circuits of the finished microprocessor. Each 8-inch wafer has up to 100 microprocessors on it. However, the typical average yield of the production line is 75% good microprocessors per wafer.

The process engineers responsible for the chemical-vapor-deposition (CVD) tool that deposits one of the many layers have an idea for improving overall yield. They propose to improve this tools vacuum with a redesign of one of its major components. The engineers believe the project will result in a 2% increase in the average production yield of non-defective microprocessors per wafer.

This company has only one CVD tool, and it can process 10 wafers per hour. The CVD tool has an average utilization rate (time running) of 80%. A wafer costs $500 to manufacture and a good microprocessor can be sold for $10. These semiconductor fabrication plants (fabs) operate 168 hours per week and all good microprocessors can be sold.

The capital investment required for the project is $2,500,000, and maintenance and support expenses are expected to be $25,000 per month. The lifetime of the modified tool will be 3 years and the company uses a MARR of 12% per year compounded monthly. Should the project be approved? Use Present Worth analysis.

please do not use excel