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Excel format would help the most :) Let's Practice! Savage Manufacturing, after deciding to invest in a new CAD system, is now faced with an
Excel format would help the most :)
Let's Practice! Savage Manufacturing, after deciding to invest in a new CAD system, is now faced with an investment decision regarding a new machine for its production processes. This machine will help the company reduce quality problems and increase manufacturing speed and reliability. This time, the company has two different versions of the machine to decide between: - Machine A costs $18,000, has installation costs of $3,500 and requires an adaptation of other processes that will come at a cost of $1,200 Machine B costs $12,000, has installation costs of $3,500 and requires an adaptation of other processes that will come at a cost of 5200 a) Which machine would you choose? (R=17%) b) Calculate the IRR of both options. c) What if Machine A had a salvage value of $800?(R=17%) d) What if that salvage value of $800 increases by 485% ? (R=17%) e) What if the installation costs for Machine B decrease by 10% ? (R=17%) f) What if the adaption costs for Machine A are split equally over the entire time of running the machine? ( R=17% ) Step by Step Solution
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