The engineering team at Manuel's Manufacturing. Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs P380,000 initially and is expected to increase revenue P125,000 per year every year. Th software and installation from Vendor B costs P280,000 and is expected to increase revenue P95,000 per year. Manuels uses a 4-yeat planning horizon and a 10.5% per year MARR. What is the present worth of investment from Vendor B (rounded to the nearest peso)? A P21,137 B P15,742 P22,507 D P17,485
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- Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows: The system will cost 9,000,000 and last 10 years. The companys cost of capital is 12 percent. Required: 1. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired? 2. Calculate the NPV and IRR for the project. Should the system be purchasedeven if it does not meet the payback criterion? 3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of 1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of 300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Does the decision change? Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does salvage value have any real bearing on the companys decision?
- Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $5 million investment in net operating working capital. The company’s tax rate is 25%. What is the initial investment outlay? The company spent and expensed $150,000 on research related to the new product last year. What is the initial investment outlay? Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. What is the initial investment outlay?The engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $395,000 initially and is expected to increase revenue $110,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $110,000 per year. Manuel’s uses a 4-year planning horizon and a 8.0 % per year MARR. What is the present worth of each investment?Vendor A: $Vendor B: $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue P125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue P95,000 per year. Manuel's uses a 4-year planning horizon and a 10% per year MARR. What is the present worth of investment from Vendor A (rounded to the nearest peso)? A) P15,742 B) P20,847 C) P16,233 D $18,901 Continuo
- The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $410,000 initially and is expected to increase revenue $110,000 per year every year. The software and installation from Vendor B costs $290,000 and is expected to increase revenue $95,000 per year. Manuel's uses a 4- year planning horizon and a 12.0% per year MARR. Part a 8 Your answer is incorrect. What is the present worth of each investment? Vendor A: $ Vendor B: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.The engineering team at Manueľ's Manufacturing, Ic., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $ 425,000 initially and is expected to increase revenue $ 105,000 per year every year. The software and installation from Vendor B costs $ 235,000 and is expected to increase revenue $ 105,000 per year. Manuel's uses a 4-year planning horizon and a 13.0 % per year MARR. Part a What is the present worth of each investment? Vendor A: $ Vendor B: $The engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue $125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $95,000 per year. Manuel’s uses a 4-year planning horizon and a 10% per year MARR. Solve, a. What is the discounted payback period of each investment? b. Which ERP system should Manuel purchase if his decision rule is to select the system with the shortest DPBP?
- The engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue $125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $95,000 per year. Manuel’s uses a 4-year planning horizon and a 10% per year MARR. What is the annual worth of each investment?Vendor A: $enter a dollar amount rounded to the nearest dollar Vendor B: $enter a dollar amount rounded to the nearest dollarThe engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an Enterprise Resource Planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue $125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $95,000 per year. Manuel’s uses a 4-year planning horizon and a 10% per year MARR. Based on an internal rate of return analysis, which ERP system should Manuel purchase?The engineering team at Manuel’s Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue $125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $95,000 per year. Manuel’s uses a 4-year planning horizon and a 10%/year MARR. Solve, a. What is the annual worth of each investment?b. What is the decision rule for determining the preferred investment basedon annual worth ranking? c. Which (if either) ERP system should Manuel purchase?