Installation of a high-tech handling system

Assignment Help Business Economics
Reference no: EM13744205

A large automobile manufacturing company is considering the installation of a high-tech handling system. The initial cost of the system is $30,000,000 and it is estimated it will save $7,500,000 per year in manual labor, and will incur $2,750,000 in annual operating and maintenance expenditures. The salvage value at the end of the system’s 10 year life is negligible. If the company’s hurdle rate (MARR) is 10% per year, should the system be recommended for implementation?

Reference no: EM13744205

Questions Cloud

Identify bill of rights and which time period it is from : identify bill of rights and which time period it is from and how it is significant to American history.
Each scenario is an example of price discrimination : Complete the following table by indicating whether or not each scenario is an example of price discrimination. Last-minute "rush" tickets can be purchased for most Broadway theater shows at a discounted price.
A public company engaged in manufacturing : Find the annual report for a public company engaged in manufacturing (e.g., Apple, GM, Pfizer). Carefully review the financial statement and other materials (e.g., Management Discussion and Analysis), focusing on the company's manufacturing processes..
What is the expected value of the gamble : You have initial wealth of $500 and are offered the following gamble. You flip a coin and if you get heads, you win $1000. If you get tails you lose $500. What is the expected value of the gamble?
Installation of a high-tech handling system : A large automobile manufacturing company is considering the installation of a high-tech handling system. The initial cost of the system is $30,000,000 and it is estimated it will save $7,500,000 per year in manual labor, and will incur $2,750,000 in ..
Marginal product of any input in the production process : The marginal product of any input in the production process is the increase in the quantity of output produced from one additional unit of that input. According to the Law of Diminishing Returns, the marginal product of an input declines as the quant..
What is the optimal number of cars to wash per hour : Suppose that you can own a car wash and that its total cost function is C= 20 + 2Q + .3Q^2 where C = total cost (in dollars) per hour and Q is the number of cars washed per hour. You receive 5 dollars for each car washed.
Property tax decrease : What effect, if any, would each of the following have on the short-run average (ATC, AFC, AVC) and marginal costs of an auto dealership:
Should the council approve the proposal : The Townsville City Council is considering a proposal by the mayor to construct a recreational facility at a cost of $1.0 million. The facility is expected to have a useful life of 30 years during which operating costs are expected to average $100,00..

Reviews

Write a Review

Business Economics Questions & Answers

  Return for stock

Evaluate the U.S. nursing shortage in terms of demand and supply.

  What is the threshold value of discrimination coefficient

what is the threshold value of the discrimination coefficient "d" at which prejudiced businesses will start hiring only white workers?

  Differentiate between real and nominal gdp

Let's take a look at all the posts above on the definition of GDP. Those definitions of GDP usually assume constant prices even though there is no clear reference to prices in the definition. That is why economists usually like to differentiate betwe..

  Explain how theory explains all three empirical observation

These three empirical observations are explained by ‘Preferred Habitat theory'. First, completely explain Preferred Habitat theory. Next, explain how this theory explains all three empirical observations.

  Illustrate what does difference in relative black-white wage

Illustrate what does the difference in the relative black-white wage ratios across regions indicate that Southern employers discriminated more than Northern employers.

  Illustrate what is maximum amount would be willing to pay

Illustrate what is maximum amount you would pay for offer of $2,000. Suppose offer was $2,000, but delivery was to be in 2 years instead of 1 year. Illustrate what is maximum amount you would be willing to pay.

  What would this do to circular flow of income and spending

Say y store it as cash in a mayonnaise jar in kitchen cabinet. What would this do to circular flow of income and spending. How would businesses react to household hoarding.

  Expression for the marginal rate of technical substitution

What factors give rise to increasing returns to scale and decreasing returns to scale? Define and then derive the expression for the marginal rate of technical substitution.

  Forest owner in a developing country claims that he earns

A forest owner in a developing country claims that he earns more m1y with carbon sequestration than with timber production.

  How every of these public polices involves

Explicates how every of these public polices involves demand for cigarettes by teenagers.

  In general are becoming less integrated

In general are becoming less integrated due to the widespread availability of interest rate and currency swaps

  Do you think this firm enjoys much market power explain

A firm has $1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $50, and competes against 800 other firms in its relevant market.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd