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

Solutions

Expert Solution

pls note, assumend inflation rate is 10%

jeff jeffy answered 1 year ago

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