Question
A company needs a modern material handling system for facilitating access to and from a busy warehouse. If the companys management use a MARR (given
A company needs a modern material handling system for facilitating access to and from a busy warehouse. If the companys management use a MARR (given below) in their economic decisions. The company found two systems, the first system is a second-hand and the second system is a new system. The economic consequences of both systems are given in the below table for each group.
PART1: For the second-hand system alternative:
a) Draw the cash flow for the economic consequences.
b) Find the present worth, annual worth, future worth.
c) Find the internal rate of return.
d) Is the system economically justified? (explain why).
e) Calculate the simple and discounted payback periods.
f) What are the annual savings required for the system to breakeven?
[Please Answer Questions on Excel and show the equations / functions if needed, to understand]
Investment cost Annual expenses $367,500 $109,700 MARR 16.1% per year Annual savings $184,200 10 years Useful life Salvage value $68,400Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started