Important information about replacement chain

Assignment Help Management Information Sys

Reference no: EM1329308

Important information about Replacement Chain

Cotner Clothes, Inc is considering the replacement of old fully depreciated knitting machine. Two new models are available. Machine 190-3, which has a cost of $190,00, a 3yr expected life, and after tax cash flows of $87000 per year; and machine 360-6, which has a cost of $360000, a 6 year life and after tax cash flows of $98300 per year. Assume that both projects can be repeated. Knitting machine prices are not expected to rise, because inflation will be offset by cheaper components used in the machines. Assume that Cotner's WACC is 14%. Should the firm replace its old knitting machine, and if so, which new machine should it use?

Reference no: EM1329308

Questions Cloud

George iii, and american revolution : Examine the actions of King George III that Thomas Jefferson identified as justification for American independence from English rule.

Question on compute the future value : Evaluate the future value of $1000 continuously compounded for:

Why is supply chain management important in ebusiness : Why is supply chain management and Customer Relationship Management important in eBusiness strategy

Disadvantages are there to dereferencing of pointer : What drawbacks are there in implicit dereferencing of pointers, but only in certain contexts? For example, consider the implicit dereference of a pointer to a record in Ada when it is used to reference a record field.

Important information about replacement chain : Important information about Replacement Chain - Should the firm replace its old knitting machine, and if so, which new machine should it use?

The volatility of demand : Assume that the volatility of demand on your service delivery system is much higher than that on your manufacturing production system.

Observability and accuracy of real interest rates compared : Illustrate what does this tell you about the observability and accuracy of real interest rates compared to nominal interest rates.

Time value of money-continuous compounding : You make deposits of $2 each year for 30 years. The rate of interest that will prevail is 10 percent for the first 20 years and then 12 percent for the remaining period.

Conduct a work process improvement analysis : Conduct a work process improvement analysis and make recommendations for improvement in various areas of the supply chain. Use effective communication techniques.

User Account

All Pages