Spent for the brake if the minimum attractive rate of return

Reference no: EM13692673

A machine that produces a certain piece must be turned off by the operator after each piece is completed. The machine "coasts" for 15 seconds after it is turned off, thus preventing the operator from removing the piece quickly before producing the next piece. An engineer has suggested installing a brake that would reduce the coasting time to 3 seconds. The machine produces 50,000 pieces a year. The time to produce one piece is 1 minute 45 seconds, excluding coastint time. The operator earns $10 an hour and other direct costs for operating the machine are $4 an hour. The brake will require servicing every 473 hours of operation. It will take the operator 30 minutes to perform the necessary maintenance and will require $56 in parts and material. The brake is expected to last 7,500 hours of operation (with proper maintenance) and will have no salvage value. How much could be spent for the brake if the Minimum Attractive Rate of Return is 10% compounded annually?

Reference no: EM13692673

Questions Cloud

Embodies the tenets of the sustainable business : Compare and contrast a company of your choice that embodies the tenets of the sustainable business along with one that embodies that of the traditional model.

Affects business strategy and management : Elaborate on how each affects business strategy and management: The business model/economic paradigm

Discuss the roles of the international monetary fund : What are the five levels of regional economic integration? Please give at least two regions and indicate at level they belong. Please discuss the roles of the International Monetary Fund (IMF).

Provide a clear argument in favour of the hospitals position : Suppose the town of Springfield has three hospitals. Hospital A has a 30% market share, Hospital B has a 35% market share, and Hospital C has a 35% market share. Hospital A and B have proposed a merger. The government argues that the merger would con..

Spent for the brake if the minimum attractive rate of return : A machine that produces a certain piece must be turned off by the operator after each piece is completed. The machine "coasts" for 15 seconds after it is turned off, thus preventing the operator from removing the piece quickly before producing the ne..

A decision maker wishes to maximize total benefit : A decision maker wishes to maximize total benefit, B = 3x + xy + y subject to the cost constraint, C = 4x + 2y = 70. Setup the Lagrangian and then determine the values of x and y at the minimum level of benefit, given the constraint. What are the max..

Interviewing three candidates for one sales job position : You are interviewing three candidates for one sales job position. On the basis of your experience and insight, you believe Jane can sell 600 units a day, Joe can sell 450 units a day, and Joan can sell 400 units a day. The daily salary each person is..

Suppose a monopolist is producing a level of output : Suppose a monopolist is producing a level of output such that MR>MC. What should the firm do to maximize its profits?

Determine a1 and a2 for approximating polynomial : Determine a1 and a2 for the approximating polynomial and the percentage errors at x=0.5 and x=0.7 compared to the exact solution of u = 4(e(-2x)-1)+8x

User Account

All Pages