Question
In: Statistics and Probability
A company manager plans to purchase a machine. The company requires a high quality machine. The...
A company manager plans to purchase a machine. The company requires a high quality machine. The manager is currently considering two companies that supply this machine. The machine from company A can produce approximately 1050 units in average per day, but the standard deviation of this machine is about 250 units per day; while the machine from company B can produce approximately 900 units in average per day, but the standard deviation of this machine is about 100 units per day. Both of these two companies guarantee at least 10 years life. In addition, both prices are similar although machine A is a little bit higher. Price is not the main concern for the manager because both prices are under their budget. However, the manager cannot decide which machine should be purchased, because he is not sure what test he needs to conduct. Can you recommend the manager what test the manager should conduct? Should the manager conduct the test about the difference between two population means or the test about the difference between two population variances or both? Discuss and explain your reasons. You must provide your statistical analysis and reasons.
Solutions
orchestra answered 2 years agoRelated Solutions
A company plans to purchase a new machine. There are two choices. The following are the...
A company plans to purchase a new
machine. There are two choices. The following are the cash flows
from two machines:
Machine
A: The machine’s initial purchase
price is $99,718, and it has a singlemaintenance fee of $6,000 at
the end of year 4. The machine would last for 7 years. Assume that
the discount rate is 8% for this machine.
Machine
B: The machine’s initial purchase
price is $10,000, and it has annualmaintenance cost of $10,000 at
the end of each...
A company is evaluating the purchase of a machine to improve product quality and output levels....
A company is evaluating the purchase of a machine to improve
product quality and output levels. The new machine would cost $1.6
million and would be depreciated for tax purposes using the
straight-line method over an estimated six-year life to its
expected salvage value of $100,000. The new machine would require
an addition of $70,000 to working capital at the beginning of the
project, which will of course be returned to the firm at the end of
the project. In...
A company is evaluating the purchase of a machine to improve product quality and output levels....
A company is evaluating the purchase of a machine to improve
product quality and output levels. The new machine would cost $1.4
million and would be depreciated for tax purposes using the
straight-line method over an estimated seven-year life to its
expected salvage value of $100,000. The new machine would require
an addition of $90,000 to working capital at the beginning of the
project, which will of course be returned to the firm at the end of
the project. In...
Heartland Paper Company is considering the purchase of a new high-speed cutting machine. Two cutting machine...
Heartland Paper Company is considering the purchase of a new
high-speed cutting machine. Two cutting machine manufacturers have
approached Heartland with proposals: (1) Toledo Tools and (2) Akron
Industries. Regardless of which vendor Heartland chooses, the
following incremental cash flows are expected to be realized.
Year
Incremental Cash Inflows
Incremental Cash Outflows
1
$
27,000
$
22,000
2
28,000
23,000
3
33,000
28,000
4
36,000
31,000
5
35,000
30,000
6
34,000
29,000
a. If the machine manufactured by Toledo Tools...
In your new role as quality manager of high-tech unit of a large national company, you...
In your new role as quality manager of high-tech unit of a large
national company, you identify a problem which is typified by the
two internal memos shown below. Discuss in some detail the
problems illustrated by this conflict, explaining how you would set
about trying to make improvements. (You should discuss at least 2
problems)
From: Marketing Director
To: Managing Director
C.C
Production Manager
Works Manager
Date: 4 August
We have recently carried out a customer survey to examine...
Pls analysis and determine which machine should purchase. ABC company requires a 12.5% rate of return...
Pls analysis and determine which machine should purchase. ABC
company requires a 12.5% rate of return and uses straight-line
depreciation to a zero-book value. Machine1 has a cost of $25,000,
annual operating costs of $1,000, and a 3-year life. Machine2 costs
$17,500, has annual operating costs of $1,300, and has a 2-year
life. No matter which machine is purchased will be replaced at the
end of its useful life. Which machine should be purchased and
why?
The operations manager for an auto supply company is evaluating the potential purchase of a new machine for the production of a transmission component.
The operations manager for an auto supply company is evaluating
the potential purchase of a new machine for the production of a
transmission component. Current manufacturing costs are
fixed costs of $11,000 and a variable cost of $0.50 per unit. The
new machine would have fixed cost of $4,000 and a variable cost of
$0.75 per unit. Each component is sold for $1.50 per unit.a. Develop two separate models in your spreadsheet to calculate
Total Profit for each option.
The...
NDA Inc. is considering a project which requires the purchase of a $160,000 machine. The CCA...
NDA Inc. is considering a project which requires the purchase of
a $160,000 machine. The CCA rate is 30%. When the project ends at
year 7, its residual value is expected to be $18,000. This machine
is the only asset in the asset class which terminates when the
project ends. The project is expected to generate before tax cash
flow of $38,000 per year for 7 years. If the project is all
financed by equity, the cost of capital would...
Looner Industries is currently analyzing the purchase of a new machine that costs $165,000 and requires...
Looner Industries is currently analyzing the purchase of a new
machine that costs $165,000
and requires $19,800in installation costs. Purchase of this
machine is expected to result in an increase in net working capital
of $30,400to support the expanded level of operations. The firm
plans to depreciate the machine under MACRS using a 5-year
recovery period (see the table
LOADING...for the applicable depreciation percentages) and
expects to sell the machine to net
$10,400 before taxes at the end of its...
A company is considering the purchase of a new machine. The machine will cost $14,000, will...
A company is considering the purchase of a new machine. The
machine will cost $14,000, will result in an annual savings of
$1750 with a salvage value of $500 at the end of 12 years. For a
MARR of 7%, what is the benefit to cost ratio?
Question options:
0.63
8.25
1.36
1.01
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