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6-08 show work Problem 6-05 Riverbed Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing
6-08 show work
Problem 6-05 Riverbed Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department received differing terms and options from each vender. The Engineering Department has determined that each vendor's punch press is substantially identical and each lossle of 20 years. In addition, Engineering has estimated that required year-end maintenance costs will be $1,090 per year for the first years, $2,090 per year for the next 10 years, and $3,090 per year for the last years. Following is each vendors sales package Vendor A: 132,170 cash at time of delivery and to year end payments of $10.870 each. Vendor A offers all its customers the right to purchase at the time of sale a separate 20-year maintenance service contract, under which Vendor A will perform all year-end maintenance at a one-timental cost of $10,520 Vendor #s: Forty semiannual payments of $9.440 each with the first installment due upon delivery. Vendors will perform all year end maintenance for the next 20 years at no extra charge Vendor Full cash price of $138.900 will be don upon delivery Assuming that both vendors A and B weill be able to peform the required year-end maintenance, that Riverbed's cost of funds is 10%, and the machine will be purchased on January 1, compute the following Old her to view factor table The present value of the cash flows for vender A. (Round factor values to decimal 1.23124 and format answer to decimal aces, ... SW.) The present value of the cash outflows for this options The present value of the cash flows for vender . (Round factor waves to become acm s. 1951 and Panwar to decimal proces, n. 458, St.) The present value of ye cash outflows for this options The present value of the cash flows for vendor C. (Round factor valoes to decimal places 1.25124 and final answer to decimales. 58,587) The present value of the cash outflows for this option is duch the press be purchased charge Vendor Full Cash price of $138,000 will be doe upon delivery Assuming that both vendors A and will be able to perform the required year-end maintenance, that overbed cost of funds is 10%, and the machine will be purchased on January 1, compute the following: Cick here to view factor tables The present value of the cash flows for vendor A. (Round factor valuestos decimal , 1.25126 and find answer to o decimal places, S8, S1) The present value of the cash outflows for this options The present value of the cash flows for vender. (Round doctor values to decimal places, as, 123124 and answer to decimal aceseg, 450, 5.) The present value of the cash outflows for this option is The privalot of the cash flows for vendor con factor values tas decimal and not answer to decimal place 451) The present value of the cash outfiows for this options From which vendor should the press be purchased The press should be purchased from Step by Step Solution
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