I NEED THE ANSWERS TO BE IN MS EXCEL WORKBOOK!!! Automotive Rebuilders, Inc., is

Question

I NEED THE ANSWERS TO BE IN MS EXCEL WORKBOOK!!!

Automotive Rebuilders, Inc., is considering a new automated assembly line to automate assembly of rebuilt alternators. The new line can be installed for SI,245.000 today and will have a life of 7 years until technological obsolescence. At the end of its 7 year life, its components will have a salvage value of $120,000. and it will cost $35,625 to have the line removed. The line will produce $427,500 additional sales capacity per year due to productivity gains. Additional technical labor cost will be $130,500 per year and operating and maintenance costs will be $44,250 per year. The company's MARR for this project is 10.0%. Based on net present value estimate, do you recommend installing the automated assembly line? What is the equivalent uniform annual worth and IRR of the project? A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are. Due to the unknown rate of technology transfer, the project life of the improvement program is unknown. The firm has a MARR of 15.0%. Use net present worth analysis to determine which alternative should it select?

Explanation / Answer

10.677%

Hence equipment should be involved (Ans)

Cash Flow Year Equipment Line removal Additional sales capacity labor cost maintenance Total cash flow PV of $1 at MARR PV of cash flows 0 -1245000 -1245000 1 -1245000 1 427500 -130500 -44250 252750 0.909090909 229772.7 2 427500 -130500 -44250 252750 0.826446281 208884.3 3 427500 -130500 -44250 252750 0.751314801 189894.8 4 427500 -130500 -44250 252750 0.683013455 172631.7 5 427500 -130500 -44250 252750 0.620921323 156937.9 6 427500 -130500 -44250 252750 0.56447393 142670.8 7 120000 -35625 427500 -130500 -44250 337125 0.513158118 172998.4 NPV ----> = 28790.57 >0

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