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1. A project to improve the process in a printing house is been held. The printing house is having problems with production and having a
1. A project to improve the process in a printing house is been held. The printing house is having problems with production and having a constant communication with their customers. A study that lasted 3 months was performed and two options where developed, determine which one is the best based on the values of the Cost Benefit Analysis, ROA, ROI, NPV, IRR and Payback Period Option 1: Invest in new equipment that has a higher capacity ($25,000). Train the employees (Costs $3,000 to have the expert on site) into a system (includes a software which is $22,000 a year) that allows for documentation to always be performed that way everybody knows where the production at and if its going to be on time or not. This will allow the company to communicate with their customers on time and let them know the status of their order. Investment: $50,000 ($25,000 + $22,000 + $3,000) Annual Costs: $34,000 Annual Revenues: $51,000 Life Period: 8 years MARR = 10% Option 2: It was found that 47% of their products can be produce inside the printing house without much problem, the rest can be sent to a third party to do it for them. There would be no cost on investment just annual expenses on shipping and paying the third-party rate. Investment: $0 Annual Costs: $26,000 Annual Revenues: $43,000 Contract Period: 8 years MARR = 10%
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