Question

In: Finance

To determine how much money you have to invest, add up the investment for the 4...

To determine how much money you have to invest, add up the investment for the 4 projects. Multiple this total by 80% to get how much money your company has to spend. Choose the best combination of projects for the company to invest in. Show one break even analysis.

Total Investment = $198420.19

Projects:
#1
Invest $60000 in a 3D Printer
Training and installation $10000
Revenue per year $18000
Cost per year $3000
Market Value year 11 $30000

#2
Invest 42276 Euros in a Flow Jet Cutter
Installation $8000
Revenue per year $14000
Cost per year $4000
Market Value year 11 $15000

#3
Invest $40000 bar coding system
Setup, training $10000
Labor savings 1st year $15000 +3%/year
Cost per year $2500
Market Value year 11 $14000

#4
Invest $88000 in an Engineering software simulation tool
Training $12000
Revenue per year $27000
Cost per year $5000
Market Value year 11 $25000

#5
Invest 20325 Euros in a conveyor
Install $5000
Savings 1st year $11000, plus 3%/year
Cost per year $4000
Market Value year 11 $25000

#6
Invest $53000 in an automated inspection tool
Calibration, setup $12000
Savings 1st year $19000 plus 3%/year
Cost per year $5000
Market Value year 11 $25000

#7
Invest $82000 in packaging equipment
Installation $8000
Revenue 1st year $22000, + 4% per year
Cost per year $4500
Market Value year 11 $35000

#8
Invest 15477 Euros in automated paint box
Training $1000
Savings 1st year $7000 plus 3%/year
Cost per year $3500
Market Value year 11 $20500

From the Finance Department:
The following information is for all the projects:
11 Year life
MACRS GDS 7 year property
Federal Corporate Tax Rate = 21%
State Corporate Tax Rate = 6.3291%
Use current currency exchange rate as needed
Use inflation rates given

Expert Solution

pls note, assumend inflation rate is 10%

jeff jeffy answered 2 years ago

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