I need help with a cost/benefit analysis for financial justifications. Preventative maintenance should be done every six
Question:
I need help with a cost/benefit analysis for financial justifications.
Preventative maintenance should be done every six months to keep maintain the equipment for extended use. There will be one service engineer that will perform the preventative maintenance that will cost the company approximately $500 an hour. It will take approximately seven hours to perform the maintenance. This will be an operational cost of $7,000 for preventative maintenance. The company will have a total of $15,000 per year so that it can have extra expenses for unexpected maintenance. If the maintenance becomes more than that each year, the company will decide to invest more than what was expected for the upcoming years. The cost for inventory will be $20,000. This will cover parts that need to be stored, parts that need to be ordered, and preventative maintenance parts.