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Currently, Bryer' s Ice Cream uses Finamac continuous ice cream machines for their process. However, last week, Emery Thompson, a competitor of Finamac came into
Currently, Bryer' s Ice Cream uses Finamac continuous ice cream machines for their process. However, last week, Emery Thompson, a competitor of Finamac came into the facility to propose a new system that would improve the operation. The current finamac system has the following characteristics: Production Labor on line Production Labor rate: le $25 per hour, 8 hour/day, 5days a week for 50 weeks per year With the Emery Thompson system, there are many improvements: Production Rate on Line: 150 Gallons per Minute Production Labor Rate $25 per hour, 8 hour/day, 5days a week for 50 weeks per year The new Emery Thompson system would cost $12,620,000 up front and would have required maintenance of $1,000,000 per year going up at 6% per year. Would you recommend this project at the company MARR of 12%? Assume that the project lifes 10 years. Aso, assume that the company can sell as many as product as it can produce for $2. (hint: find the NPV of the difference between the two alternatives) Do Why? Currently, Bryer' s Ice Cream uses Finamac continuous ice cream machines for their process. However, last week, Emery Thompson, a competitor of Finamac came into the facility to propose a new system that would improve the operation. The current finamac system has the following characteristics: Production Labor on line Production Labor rate: le $25 per hour, 8 hour/day, 5days a week for 50 weeks per year With the Emery Thompson system, there are many improvements: Production Rate on Line: 150 Gallons per Minute Production Labor Rate $25 per hour, 8 hour/day, 5days a week for 50 weeks per year The new Emery Thompson system would cost $12,620,000 up front and would have required maintenance of $1,000,000 per year going up at 6% per year. Would you recommend this project at the company MARR of 12%? Assume that the project lifes 10 years. Aso, assume that the company can sell as many as product as it can produce for $2. (hint: find the NPV of the difference between the two alternatives) Do Why
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