ACC225_BusinessAssignment11 CapitalCostOfRepairFordsAluminumF150_V1 Mailings Review View AaBbCcDdEe AaBbCcDdee No Spacing Aa Hea Normal Business Assignment 11 - Capital Costs of Repair Ford's Aluminum F-150 Read the attached article about Ford dealerships needing to invest in equipment to repair the new aluminum F-150 1. Compute the total cost of the equipment that Ford recommends dealers buy: 2. If a dealership is looking for a payback of no more than 3 years, how much annual cash flow must the dealership generate from this investment? 3. If a dealership requires a 10% return on its investments, and is looking at a 3 year time frame, how much annual cash flow must be generated from the investment using the net present value method? Present Value of $1 Periods 10 12 14 10 10 20 1 0926 0.00 0.00 0.87701208170830 2 0.657 0.025 0797 0.7690 700 710 0.64 3 074 075107126.675 0641 0.0.579 4 0.735 0.03 0.636 0.5920 552 0.16 0.482 6 0601021 0567 0.519 0478 0.437 0402 6 060 0554 O 507 0.456 04100370 0.335 T 050 051 0452 0.400 0.4 03 0279 # 540 046704040351 0.305 024 0233 500 0.404 03 02 026 0225154 Present Value of an annuity of $1 Period 8% 10% 12% 14% 16% 10% 20% 0 926 0909 0.893 0.877 0.862 0.347 0.833 2 1.780 1736 1.690 1,647 1605 1.566 1.528 3 2.577 2.487 2.402 2.322 2246 2.174 2.106 4 3.312 3.170 3.037 291 2.798 2.490 2.589 3.999 3.791 3.605 3.433 3.214 3.127 2.991 4.623 4.355 4.111 3.89 3.625 S206 4064564 4200 4.099 322 3605 5.747 533496 499 434 4078 3837 6247 5.75 5.320 446 467 4300 401 Malysheview View AaBE Head AaBbCcDdEe AaBbCcDdEe " A = = = = = $ , , Normal No Spacing Ford Dealers: Cost of Body Shop for Aluminum F-150 May Top $70K By Bradford Wernle Originally published: March 23, 2014 8:00 AM Modified: March 25, 2014 1:35 AM Photo by BRADFORD WERNLE/CRAIN NEWS SERVICE Because aluminum dust causes corrosion on steel, the section of a body shop that works on the aluminum Ford F-150 must be isolated from the rest of the shop. Ford dealer Ed Jolliffe has been calculating the cost of getting his body shop ready for the 2015 aluminum F-150 pickup and finds the number's sobering. "It's going to cost anywhere from $50,000 to $100,000. That's a hell of a chunk." said Jolliffe, who owns Gorno Ford in Woodhaven. "I don't think it's for the faint of heart. All the small shops won't be able to touch He figures it could take five to seven years to recoup that investment, which he deems essential to stay in the body shop business. Ford Motor Co. is targeting dealers with large body shops as it tries to organize the F-150 aluminum body repair system. For those dealers, the investment will exceed the $30,000 to $50,000 that Ford has cited for a single repair bay. Like Jolliffe, many dealers say the cost could be $70,000 or more. Ford's effort is creating the Ford National Body Shop Network of dealers and independent shops capable-Ford shies away from the term "certified" of large structural repairs. The network, tates) Mailings Review View AaBbCcDdEe A E = EE II AaBbccddee No Spacing AaBbcc Heading Normal showrooms and will be listed on a body shop locator on ford.com By year's end, Ford wants a network of about 1,500 aluminum-capable body shops, including its 460 dealerships and more than 1,000 independent shops. A dent in dealer budgets Equipment that Ford recommends dealers and independent shops buy to repair the aluminum F-150: Rubberized curtains to isolate work area: $1,678 MIG (metal inert gas) welder: $7,994 Fume extractor: $3,329 Dust collection system: $10,125 Aluminum spot weld station: $7,950 Aluminum rivet gun: $7,729 Collision shops need separate tools and work areas for aluminum to prevent aluminum dust from getting on steel parts, which causes corrosion. Ford officials say most dealers still will be able to repair routine fender benders. Dealers are not required to join the network "We're looking for the guys who are really in the body shop business," said Paul Massie. Ford collision marketing manager, speaking of the prime candidates for the repair network The $30,000 to $50,000 amounts to a starter kit for aluminum repair. It includes a rivet gun, metal inert gas welder, hand tools, a vacuum cleaner for aluminum dust and curtains or walls to separate the steel and aluminum work areas. That's necessary because aluminum and steel do not mix. If minute amounts of aluminum dust end up on a steel body part in a paint shop, galvanic corrosion occurs, eventually causing stike spots to bleed through the paint. Mitchell Dale, owner of McRee Ford in Dickinson, Texas, says the investment is going to be higher than he had expected about $70,000. "But it's something we've got to do," he said. "For shops like us, we're not looking at just one workstation. Down the road, I see us having two or three workstations Jim Faroy, Ford Motor Co.'s executive vice president of global marketing, sales, service and Lincoln said Ford is about halfway to the goal of 460 dealership body shops. Ford wants the dealer network to be in place by Oct. 31. Independent shops have until year's end. The 2015 F-150 is scheduled to arrive in showrooms late this year. States) ACC225_BusinessAssignment11 CapitalCostOfRepairFordsAluminumF150_V1 Mailings Review View AaBbCcDdEe AaBbCcDdee No Spacing Aa Hea Normal Business Assignment 11 - Capital Costs of Repair Ford's Aluminum F-150 Read the attached article about Ford dealerships needing to invest in equipment to repair the new aluminum F-150 1. Compute the total cost of the equipment that Ford recommends dealers buy: 2. If a dealership is looking for a payback of no more than 3 years, how much annual cash flow must the dealership generate from this investment? 3. If a dealership requires a 10% return on its investments, and is looking at a 3 year time frame, how much annual cash flow must be generated from the investment using the net present value method? Present Value of $1 Periods 10 12 14 10 10 20 1 0926 0.00 0.00 0.87701208170830 2 0.657 0.025 0797 0.7690 700 710 0.64 3 074 075107126.675 0641 0.0.579 4 0.735 0.03 0.636 0.5920 552 0.16 0.482 6 0601021 0567 0.519 0478 0.437 0402 6 060 0554 O 507 0.456 04100370 0.335 T 050 051 0452 0.400 0.4 03 0279 # 540 046704040351 0.305 024 0233 500 0.404 03 02 026 0225154 Present Value of an annuity of $1 Period 8% 10% 12% 14% 16% 10% 20% 0 926 0909 0.893 0.877 0.862 0.347 0.833 2 1.780 1736 1.690 1,647 1605 1.566 1.528 3 2.577 2.487 2.402 2.322 2246 2.174 2.106 4 3.312 3.170 3.037 291 2.798 2.490 2.589 3.999 3.791 3.605 3.433 3.214 3.127 2.991 4.623 4.355 4.111 3.89 3.625 S206 4064564 4200 4.099 322 3605 5.747 533496 499 434 4078 3837 6247 5.75 5.320 446 467 4300 401 Malysheview View AaBE Head AaBbCcDdEe AaBbCcDdEe " A = = = = = $ , , Normal No Spacing Ford Dealers: Cost of Body Shop for Aluminum F-150 May Top $70K By Bradford Wernle Originally published: March 23, 2014 8:00 AM Modified: March 25, 2014 1:35 AM Photo by BRADFORD WERNLE/CRAIN NEWS SERVICE Because aluminum dust causes corrosion on steel, the section of a body shop that works on the aluminum Ford F-150 must be isolated from the rest of the shop. Ford dealer Ed Jolliffe has been calculating the cost of getting his body shop ready for the 2015 aluminum F-150 pickup and finds the number's sobering. "It's going to cost anywhere from $50,000 to $100,000. That's a hell of a chunk." said Jolliffe, who owns Gorno Ford in Woodhaven. "I don't think it's for the faint of heart. All the small shops won't be able to touch He figures it could take five to seven years to recoup that investment, which he deems essential to stay in the body shop business. Ford Motor Co. is targeting dealers with large body shops as it tries to organize the F-150 aluminum body repair system. For those dealers, the investment will exceed the $30,000 to $50,000 that Ford has cited for a single repair bay. Like Jolliffe, many dealers say the cost could be $70,000 or more. Ford's effort is creating the Ford National Body Shop Network of dealers and independent shops capable-Ford shies away from the term "certified" of large structural repairs. The network, tates) Mailings Review View AaBbCcDdEe A E = EE II AaBbccddee No Spacing AaBbcc Heading Normal showrooms and will be listed on a body shop locator on ford.com By year's end, Ford wants a network of about 1,500 aluminum-capable body shops, including its 460 dealerships and more than 1,000 independent shops. A dent in dealer budgets Equipment that Ford recommends dealers and independent shops buy to repair the aluminum F-150: Rubberized curtains to isolate work area: $1,678 MIG (metal inert gas) welder: $7,994 Fume extractor: $3,329 Dust collection system: $10,125 Aluminum spot weld station: $7,950 Aluminum rivet gun: $7,729 Collision shops need separate tools and work areas for aluminum to prevent aluminum dust from getting on steel parts, which causes corrosion. Ford officials say most dealers still will be able to repair routine fender benders. Dealers are not required to join the network "We're looking for the guys who are really in the body shop business," said Paul Massie. Ford collision marketing manager, speaking of the prime candidates for the repair network The $30,000 to $50,000 amounts to a starter kit for aluminum repair. It includes a rivet gun, metal inert gas welder, hand tools, a vacuum cleaner for aluminum dust and curtains or walls to separate the steel and aluminum work areas. That's necessary because aluminum and steel do not mix. If minute amounts of aluminum dust end up on a steel body part in a paint shop, galvanic corrosion occurs, eventually causing stike spots to bleed through the paint. Mitchell Dale, owner of McRee Ford in Dickinson, Texas, says the investment is going to be higher than he had expected about $70,000. "But it's something we've got to do," he said. "For shops like us, we're not looking at just one workstation. Down the road, I see us having two or three workstations Jim Faroy, Ford Motor Co.'s executive vice president of global marketing, sales, service and Lincoln said Ford is about halfway to the goal of 460 dealership body shops. Ford wants the dealer network to be in place by Oct. 31. Independent shops have until year's end. The 2015 F-150 is scheduled to arrive in showrooms late this year. States)