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How do i do this step by step? Please Help The Brisbane Manufacturing Company produces a single model of a CD player. Each player is
How do i do this step by step? Please Help
The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for $200 with a resulting contribution margin of $73. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends $39,500 a year to inspect the CD players. An average of 1,900 units turn out to be defective: 1,520 of them are detected in the inspection process and are repaired for $75. If a defective CD player is not identified in the inspection process, the customer who receives it is given a full refund of the purchase price. The proposed quality control system involves the purchase of an x-ray machine for $210,000. The machine would last for four years and would have salvage value at that time of $20,000. Brisbane would also spend $430,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $23,000. Brisbane expects this new control system to reduce the number of defective units to 350 per year. 280 of these defective units would be detected and repaired at a cost of only $43 per unit. Customers who still receive defective players will be given a refund equal to 120% of the purchase price. Questions 1 & 2 (0 points; unlimited tries] 380 1. What is the Year 3 cash flow if Brisbane keeps using its current system? Submit Answer Incorrect. Tries 1/99 Previous Tries 2. What is the Year 3 cash flow if Brisbane replaces its current system? Submit Answer Tries 0/99 Questions 3 & 4 [5 points each; 5 tries each] 3. Assuming a discount rate of 8%, what is the net present value if Brisbane keeps using its current system? Submit Answer Tries 0/5 4. Assuming a discount rate of 8%, what is the net present value if Brisbane replaces its current systemStep by Step Solution
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