Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

film manufacturer is trying to decide between 8 types of thermoforming molding processes to be added to its molding operation. The estimated costs and revenues

film manufacturer is trying to decide between 8 types of thermoforming molding

processes to be added to its molding operation. The estimated costs and revenues are shown

below. Compare them on the basis of the IRR method and determine which process should be

selected if the company's MARR is 7% per year.

A

B

C

D

E

F

G

Initial Costs

$13,000

$12,000

$11,000

$12,500

$16,000

$26,000

$19,500

Annual expenses

$6,550

$7,000

$8,000

$7,000

$11,000

$12,000

$13,000

Annual revenue

$9,125

$9,000

$10,000

$9,500

$13,500

$16,000

$16,200

Lifetime(years)

9

9

9

9

9

9

9

IRR

11.54%

6.88%

9.17%

11.81%

5.24%

4.86%

6.48%

Perform an IRR-incremental analysis to find the best alternative.

a. Show the last iteration table of your process:


ITERATION HEADER ?

Initial cost?

Annual expenses?

Annual revenue ?

Life time ( years ) ?

IRR ? %

b. The best alternative is?

c. Show your steps with your own handwriting. (Drag & Drop in the image of your work in the following box as a JPG, PNG, etc.)

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_2

Step: 3

blur-text-image_3

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

Understanding And Auditing IT Systems Volume 2

Authors: Young-Woon Min

2nd Edition

1257758837, 978-1257758838

More Books

Students also viewed these Accounting questions

Question

What is a break-even point?

Answered: 1 week ago

Question

What lessons in OD contracting does this case represent?

Answered: 1 week ago

Question

Does the code suggest how long data is kept and who has access?

Answered: 1 week ago