hne / study /business / accorong /accoungquestions uswers / ecei t2 protiem & data sole powec ic s one of the largest lolar pan Question: Excel #2 Problem & Data Solar Power, Inc. is one of the largest. (2 bookmarks) Excel #2 Problem & Data Solar Power, Inc. is one of the largest solar panel manufacturers in the U.S. it has a proven track record for sustainability manufacturing. The company controls the entire manufacturing process from materials sourcing to assembly to delivery of its solar systems. The company is investigating the purchase of a robot system for use on the company's assembly line which would improve quality control of the solar cells. The use of the robot would ensure that the manufacturing process of the solar cells would be pristine and untouched by human hands untl final inspection. Data related to the purchase, installation, and cost savings are provided below Cost of the robot system Installation and software Annual savings in labor costs Annual savings in inventory carrying costs Monthly increase in power and maintenance costs Salvage value in 10 years Useful life $1,800,000 900,000 210,000 2.500 70,000 10 years The company's Engineering Dept, has conducted several studles regarding the possible labor savings that will result from the purchase of the robot system. The Engineering Dept believes that the robot system will result in a savings of 50,000 direct labor hours each year at an average rate of S8.00 per hour. Company engineers also believe that the work flow will become smoother and more efficient due to the automation and will allow the company to reduce its inventory on hand by $400,000. The inventory reduction will take place at the end of the first year of operation; the released funds will be available for use elsewhere in the company Solar Power requires a 20% retum on al equipment purchases Shelby Maxwell, Vice-President of Operations, has noted that all of Solar Power's competitors are automating their plants. However, she is pessimistic, about whether Solar Power's president will allow it to automate. In preparing the proposal for the robot, she stated to a colleague, "Let's just hope that reduced labor and inventory costs can justify the purchase of this automated equipment. Otherwise, we'll never get t approved by the president. You know how the president feels about equipment paying for itself out of reduced costs REQUIRED 1 Determine the net annual cost savings if the robot is purchased (Do not include the $400,000 inventory reduction or the salvage value in this computation. These are NOT part of the ANNUAL cost savings ) Include this in your data block page. You can use the format provided in the Excel #2 instructions 2 Compute the net present value (NPV) of the proposed investment in the robot using the format in the Excel 12 instructions. Based on these data results, would you recommend that the robot be purchased? Explain (Worth 2 pts) Put your answer to Part 2 in your data block page Label your answer Part 2 Do not just say "Yes" or "No? Explain why you believe the company should or should not purchase the robot Support your position with the results of your NPV calculation 3 Assume that the robot is purchased. At the end of the first year, Shelby Maxwell has found that some items didn't work out as planned Due to unforeseen problems, software and installation costs were $75,000 anunacturers us-proven-track-q37 CheggStudy TEXTBOOK SOLUTIONS EXPERT OSA PRACTICE- Search place at the end of the first year of operation; the released funds will be available for use elsewhere in the company. Solar Power requires a 20% retum on all equipment purchases Shelby Maxwell, Vice-President of Operations, has noted that all of Solar Power's competitiors are automating their plants. However, she is pessimistic, about whether Solar Power's president will allow it to automate In preparing the proposal for the robot, she stated to a colleague, "Let's just hope that reduced labor and inventory costs can justify the purchase of this automated equipment Otherwise, we'll never get It approved by the president You know how the president feels about equipment paying for itself out of reduced costs REQUIRED 1 Determine the net annual cost savings if the robot is purchased (Do not include the $400,000 inventory reduction or the salvage value in this computation These are NOT part of the ANNUAL cost savings.) include this in your data block page You can use the format provided in the Excel 82 instructions 2 Compute the net present value (NPV) of the proposed investment in the robot using the format in the Excel #2instructions. Based on these data results, would you recommend that the robot be prchased (Worth 2 pts) Explain. Put your answer to Part 2 in your data block page Label your answer Part 2: Do not just say "Yes" or "No" Explain why you believe the company should or should not purchase the robot Support your position with the results of your NPV calculation 3 Assume that the robot is purchased At the end of the first year, Shelby Maxwell has found that some items didn't work out as planned Due to unforeseen problems, software and instalation costs were $75,000 more than estimated and direct labor has been reduced by only 45.000 hours per year, rather than by 50,000 hours. Assume that all other cost data were accurate Save your original tile and then open your fie and save it again under a new name. See the Excel 82 and your spreadsheet should automatically recalculate the NPV using the new data. Does it appear that the company made a wise invesgment? Explain (Worth 2 pts) answer Part 3 Explain your answer Again, do not just answer Yes" or No Support your position with on how to name your files Then just change the data block entry area for the new data above Put your ancwer to the question above (underined) in your data block page of the new flie. Labe your NPV calculation 4 Upon seeing your analysis in Part 3 above, Solar Power's president stated. "That robot system is the worst investment we've ever made. And now we'll be stuck with it for years" savings might accrue from use of a Explain to the president what benefits other than the above cost the new robot. Label your answer Part 4a) A minimum of three other benefits must be isted to receive credit (Worth 3 pts) b Compute for the president the doilar amount of cash inflow that would be needed each year from the intangible benefits in (4a) above for the robot to yield a 20% rate of return (Hint NPV /factor Net Annual Cash FOwLabel youranswer: Part 4t. (worth 2 pts 20 yrs. at 20% Type your answers for Part 4a) and tbl into the data block page of the new file Expert Answer o