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Lean X Neti × carr × Prin × Secure | https://oregonstate.instructure.com/courses/1648905/quizzes/2397515/take Piazza 0 Minutes, 43 Seconds Question 1 0.5 pts Oregen State A company is trying to decide between two machines for its manufacturing line. The Process1000 has an initial cost of $64625 and operating costs of $11 per hour. It will allow the company to produce a higher quality product, providing an annual benefit of $69022. The company will use the Process1000 11215 hours per year. The Process1000 has a useful life 3 years and an estimated salvage value of $18705 at the end of its useful life. The Super X has an initial cost of $79859. It is a bigger machine and can process more at a time so the company will ony need to use it for 7287 hours per year. The Super X has an estimated benefit of $94995 per year. The Super X will have a useful life of 9 years and a salvage value of $28942 at the end of its useful life Using a MARR of 2%, what is the maximum operating cost per hour at which the Super X could run to make it equally desirable to the Process 000? Enter your answer as follows 12.34 Round your answer to 2 decimal places. Do not use a dollar sign$ or any commas) 28 D Question 2 0.5 pts Help Tristan's Toys invested in a new manufacturing system. The initial cost was $295471. Annual costs are projected to be $161500. increasing by 11% each subsequent year. The system will require a substantial overhaul of $54186 at the end of year 8. The line is estimated to have a lifespan of 12 years The company projects it will sell 66300 units the first year, with the number of units sold increasing by 40149 units each subsequent year. What is the minimum price that the company must charge per unit to breakeven on the investment? Use a MARR of 8% compounded annually to make the Enter your answer as follows: 12.34-round to two decimal places Do not use a dollar sign($]. 10:56 PM 11/12/2017

Explanation / Answer

Process 1000 Operating cost per hour Year 0 1 2 3 $                                   20.92 Hours used 11215 11215 11215 Annual benefit 69022 69022 69022 Operating costs 234619.3 234619.3 234619.3 Initial cost 64625 Salvage value 18705 Net cash flow -64625 -165597 -165597 -146892 NPV@2% -524562.0213 Super X Year 0 1 2 3 4 5 6 7 8 9 Hours used 7287 7287 7287 7287 7287 7287 7287 7287 7287 Annual benefit 94995 94995 94995 94995 94995 94995 94995 94995 94995 Operating costs 152445 152445 152445 152445 152445 152445 152445 152445 152445 Initial cost 79859 Salvage value 28942 Net cash flow -79859 -57450 -57450 -57450 -57450 -57450 -57450 -57450 -57450 -28508 NPV@2% -524562.0213 Difference in NPV 0 So the maximum operating costs would run to make it equally desirable is $ 20.92 Year 0 1 2 3 4 5 6 7 8 9 10 11 12 Units sold 66300 106449 146598 186747 226896 267045 307194 347343 387492 427641 467790 507939 Revenue 84898.45 136310.0277 187721.6 239133.2 290544.8 341956.3 393367.9 444779.5 496191.1 547602.7 599014.2 650425.8 Annual costs 161500 179265 198984.2 220872.4 245168.4 272136.9 302072 335299.9 372182.8 413123 458566.5 509008.8 Overhaul 54186 Initial costs 295471 Cash flow -295471 -76601.6 -42954.97231 -11262.5 18260.78 45376.4 69819.46 91295.98 55293.64 124008.2 134479.7 140447.8 141417 Price $              1.28 NPV @ 8% 0

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