Question
In: Finance
The Pasta factory will open soon. The owner has chosen two from the several tenders, but...
The Pasta factory will open soon. The owner has chosen two from the several tenders, but cannot decide which one to accept, so he turns to you for advice. The same quality of pasta can be produced by both machines, and they can be replaced with the same conditions in long run. The expected return of similar investments is 16%. The machine details are the following:
| "A" machine | "B" machine | ||
| Purchase price (K EUR) | 150 | 100 | |
| Lifetime (year) | 5 | 3 | |
| Yearly operational costs (K EUR) | 20 | 30 | |
| Yearly revenue (K EUR) | 100 | 115 | |
a) Which machine would you choose by the NPV?
b) Which machine would you choose by the equivalent annual benefit?
c) Assume that you use the machine as private, so the yearly revenues do not count. Which machine would you choose if you need the machine for a long-term, and you can purchase a new machine with the same conditions?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
• Given the information below, answer questions from #9 to #10. The owner of Cheesecake Factory...
• Given the information below, answer questions from #9
to #10.
The owner of Cheesecake Factory at the Forum Shop is renegotiating
the operation’s lease and has the option of either (1) an annual
fixed lease of $55,000 or (2) an annual fixed lease of $10,000 plus
a variable lease set at 5% of annual revenue.
What is the indifference point?
A. $900,000
B. $1,100,000
C. $1,000,000
D. $1,300,000
Which option will cost less for the owner if annual
revenue...
Imagine you work for a company that has been planning to open a new factory in...
Imagine you work for a company that has been planning to open a
new factory in France in two years. The president of the company
had received an estimate for 300 million Euros for the plant
investment. The cost of capital for the investment was assumed to
be 10%. You are part of the taskforce that provided the company
president with this assessment. However, recently the sovereign
credit rating of the country was down-graded by a major
transnational credit-rating agency....
Leon has worked for a small tool and die company for several years. The owner is...
Leon has worked for a small tool and die company for several
years. The owner is retiring and Leon has the opportunity to
purchase the business. However, he plans to retire in 10 years, and
he knows that neither of his children has any desire to work in the
business. What appears to be Leon’s key consideration in choosing
an ownership structure?
a.
Business control and transfer of ownership
b.
Ease of start-up and administration
c.
Management structure
d.
Legal...
The owner of a barbershop has two barber chairs and one employee. The owner will cut...
The owner of a barbershop has two barber chairs and one
employee. The owner will cut a customer’s hair only if her employee
is already busy cutting someone else’s hair. Service times are
exponentially distributed with mean 1 hour, and the time between
arrivals is exponentially distributed with mean 1.5 hours. When the
barbershop is full(i.e., two customers are getting haircuts),
people must wait outside in line.
a)What percentage of the time is the owner cutting hair?
b)If the owner...
Suppose a manufacturing firm has two factories (Factory 1 and Factory 2), and a single production...
Suppose a manufacturing firm has two factories (Factory 1 and
Factory 2), and a single production process (Process A) that is
used in both factories. A new process (Process B) is developed that
potentially reduces production costs. To test whether Process B is
less costly than Process A, an experiment is designed where:
Within each Factory, products are assigned randomly to Process
A or Process B.
Production costs for each product are recorded.
Note that resources (i.e. materials, workers, equipment)...
Suzie is the owner of Tran's Good Eats, a downtown restaurant. She has several entree dishes...
Suzie is the owner of Tran's Good Eats, a downtown restaurant.
She has several entree dishes that feature chicken, pork and beef.
The pork and beef dishes are priced higher than the chicken dishes,
however, they have a lower contribution margin. Recently, the
prices of pork and beef have gone up, further lowering the gross
margin on those dishes. The owner has thought of increasing the
prices on the entrees, but feels that Good Eats will no longer be
competitive...
Brewster’s Used Cars, Inc. employs several salespeople. Brewster, the owner of the company, has provided a...
Brewster’s Used Cars, Inc. employs several salespeople.
Brewster, the owner of the company, has provided a file that
contains sales records for each salesperson for the past month.
Each record in the file contains the following two fields:
The salesperson’s ID number, as an integer
The amount of a sale, as a real number
The records are already sorted by salesperson ID. Brewster wants
you to design a program that prints a sales report. The report
should show each salesperson’ssales...
A girl who has two siblings is chosen at random and the number X of her...
A girl who has two siblings is chosen at random and the number X
of her sisters is counted. Describe how to simulate an observation
on X based on U ∼ unif[0, 1] in Matlab.
Nine homes are chosen at random from real estate listings in two suburban neighborhoods, and the...
Nine homes are chosen at random from real estate listings in two
suburban neighborhoods, and the square footage of each home is
noted in the following table.
Size of Homes in Two Subdivisions
Subdivision
Square Footage
Greenwood
2,821
2,595
2,565
2,801
2,383
2,451
2,858
2,871
2,611
Pinewood
2,617
2,501
2,564
2,786
2,392
2,511
2,492
2,687
3,964
(b) Specify the decision rule with respect to
the p-value.
Reject the null hypothesis if the p-value is (Click to
select)greater thanless than 0.10....
Nine homes are chosen at random from real estate listings in two suburban neighborhoods, and the...
Nine homes are chosen at random from real estate listings in two
suburban neighborhoods, and the square footage of each home is
noted in the following table.
Size of Homes in Two Subdivisions
Subdivision
Square Footage
Greenwood
2,671
2,755
2,500
2,489
2,446
2,376
2,327
2,450
2,834
Pinewood
2,659
2,340
2,813
2,775
2,734
2,420
2,457
2,535
3,449
(a) Choose the appropriate hypothesis to test
if there is a difference between the average sizes of homes in the
two neighborhoods at the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 1. Many operating systems now operate on 64 bits of memory. What is the highest base...
- 1. The empirical rule says that 95% of the population is within 2 standard deviations of...
- What are some adaptive traits for tigers what are some adaptations of a tiger
- Question I'm having trouble with: Using LISP, write a recursive function that takes a list and...
- Gatekeeping: What are the causal effects of AI (Artificial Intelligence) in hiring processes and how can...
- Write code that would go where the comment "#your line will go here" so that the...
- The tires of a car make 78 revolutions as the car reduces its speed uniformly from...
ADVERTISEMENT