Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company decided to develop low-cost photo-voltaic solar-energy cells. It decided on two development choices: a fully automatic line for $800,000 capable of producing 200,000

A company decided to develop low-cost photo-voltaic solar-energy cells. It decided on two development choices: a fully automatic line for $800,000 capable of producing 200,000 cells/year for a profit of $1/cell, or a semi-automatic line for $500,000 capable of producing 120,000 cells/year for a profit $1/cell. It is estimated that both lines will last for five years and will have a book value at the end of the five years of 10 percent. Assume both lines will be working to 100 percent capacity. You are the PM for development. Please make all calculations with or without taxes. g. Assuming an interest rate of 5% and life of n = 5 years with no tax consequences or book value remaining, show probability analysis for PV for $500,000 semi-automatic @ 120,000 cells/year machine assuming two probabilities of profit per cell and useful number of years (n) for the machine. P (profit = $0.80) is 0.8 and P (profit = $1) is .20; and P (n = 5) is 0.4 and P (n = 4) is 0.6

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Primary English Audit And Test

Authors: Sue Reid, Angela Sawyer, Mary Bennett-Hartley

4th Edition

1446282759, 978-1446282755

More Books

Students also viewed these Accounting questions