Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $46,000. an annual operating cost (AOC) of $7,000, and a service life of 2 years. Method B will cost $86,000 to buy and will have an AOC of $3,500 over its 4-year service life. Method C costs $115,000 initially with an AOC of $6,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 12% of its first cost. erform a present worth analysis to select the method at /= 10% per year.

Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $46,000. an annual operating cost (AOC) of $7,000, and a service life of 2 years. Method B will cost $86,000 to buy and will have an AOC of $3,500 over its 4-year service life. Method C costs $115,000 initially with an AOC of $6,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 12% of its first cost. erform a present worth analysis to select the method at /= 10% per year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $46,000, an annual operating cost (AOC) of $7,000, and a service life of 2 years. Method B will cost $86,000 to buy and will have an AOC of $3,500 over its 4-year service life. Method C costs $115,000 initially with an AOC of $6,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 12% of its first cost. Perform a future worth analysis to select the method at /= 10% per year. The future worth of method A is $ The future worth of method B is $ The future worth of method C is $ Method: (Click to select) is selected. (Click to select C CBA A
An electric switch manufacturing company has to choose one of three different assembly methods.Method A will have a first cost of $40,000, an annual operating cost of $9000, and a service life of2 years. Method B will cost $80,000 to buy and will have an annual operating cost of $6000 overits 4-year service life. Method C will cost $130,000 initially with an annual operating cost of $4000over its 8-year life. Methods A and B will have no salvage value, but method C will have someequipment worth an estimated $12,000. Which method should be selected? Use present worthanalysis at an interest rate of 10% per year. *please answer in a neat and clear way.
Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $45,000, an annual operating cost (AOC) of $6,000, and a service life of 2 years. Method B will cost $85,000 to buy and will have an AOC of $3,000 over its 4-year service life. Method C costs $145,000 initially with an AOC of $5,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 11% of its first cost. Perform a present worth analysis to select the method at /= 14% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ Method (Click to select) is selected. A
Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $34,000, an annual operating cost (AOC) of $5,000, and a service life of 2 years. Method B will cost $77,000 to buy and will have an AOC of $4,000 over its 4-year service life. Method C costs $145,000 initially with an AOC of $6,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 13% of its first cost. Perform a future worth analysis to select the method at i = 14% per year. The future worth of method A is $ The future worth of method B is $ The future worth of method C is $ Method (Click to select) v is selected.
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