"I'm not sure we should lay out $250,000 for that automated welding machine," said Jim Alder, president of the Superior Equipment Company. "That's a lot of money, and it would cost us $80,000 for software and installation, and another $36,000 per year just to maintain the thing. In addition, the manufacturer admits it would cost $45.000 more at the end of three years to replace wom-out parts. "I admit it's a lot of money," said France Rogers, the controller. "But you know the turnover problem we've had with the welding crew This machine would replace six welders at a cost savings of $108,000 per year. And we would save another $6,500 per year in reduced material waste. When you figure that the automated welder would last for six years, I'm sure the return would be greater than our 16% required rate of return. "I'm still not convinced." countered Mr. Alder. "We can only get $12.000 scrap value out of our old welding equipment if we sell it now, and in six years the new machine will only be worth $20,000 for parts. But have your people work up the figures and we talk about them at the executive committee meeting tomorrow." Click here to view Exhibit78-1 and Exhibit 7B-2. to determine the appropriate discount factor(s) using tables. Required: 1. Compute the annual net cost savings promised by the automated welding machine. 2a. Using the data from (1) above and other data from the problem, compute the automated welding machine's net present value 2b. Would you recommend purchasing the automated welding machine? 3. Assume that management can identify several intangible benefits associated with the automated welding machine, including greater flexibility in shifting from one type of product to another, improved quality of output, and faster delivery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in order to make the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 28 Rega Compute the annual net cost savings promised by the automated welding machine Annual net cost savings Reg 2A > FRETOL SUIE WE SUI lay Out 3250UUU TOR Lidl autunno wey Lime, SIU JU MIUI, piese LULUI JUU Company. "That's a lot of money, and it would cost us $80,000 for software and installation, and another $36,000 per y maintain the thing. In addition, the manufacturer admits it would cost $45,000 more at the end of three years to replace parts. "I admit it's a lot of money," said Franci Rogers, the controller. "But you know the turnover problem we've had with the we This machine would replace six welders at a cost savings of $108,000 per year. And we would save another $6,500 per reduced material waste. When you figure that the automated welder would last for six years, I'm sure the return would be our 16% required rate of return." "I'm still not convinced," countered Mr. Alder. "We can only get $12,000 scrap value out of our old welding equipment if w and in six years the new machine will only be worth $20,000 for parts. But have your people work up the figures and we' them at the executive committee meeting tomorrow." Click here to view Exhibit 7B-1 and Exhibit 7B-2. to determine the appropriate discount factor(s) using tables Required: 1. Compute the annual net cost savings promised by the automated welding machine 2a. Using the data from (1) above and other data from the problem, compute the automated welding machine's net present 2b. Would you recommend purchasing the automated welding machine? 3. Assume that management can identify several intangible benefits associated with the automated welding machine, inclu greater flexibility in shifting from one type of product to another, improved quality of output, and faster delivery as a result o throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in orde the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Reg 3 Using the data from (1) above and other data from the problem, compute the automated welding machine's net present value. (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Net present value 11 TL Suie we nuiu lay VUL DZUUUUU IU UGL autollateu weluryhole, diu JU MIUI, piestu LUI UE super cyuipe Company. "That's a lot of money, and it would cost us $80,000 for software and installation, and another $36,000 per year just maintain the thing. In addition, the manufacturer admits it would cost $45,000 more at the end of three years to replace worn-o parts. "I admit it's a lot of money," said Franci Rogers, the controller. "But you know the turnover problem we've had with the welding This machine would replace six welders at a cost savings of $108.000 per year. And we would save another $6.500 per year in reduced material waste. When you figure that the automated welder would last for six years, I'm sure the return would be greate our 16% required rate of return." "I'm still not convinced." countered Mr. Alder. "We can only get $12.000 scrap value out of our old welding equipment if we sell it and in six years the new machine will only be worth $20,000 for parts. But have your people work up the figures and we'll talk al them at the executive committee meeting tomorrow." Click here to view Exhibit 78.1 and Exhibit 7B-2. to determine the appropriate discount factor(s) using tables. Required: 1. Compute the annual net cost savings promised by the automated welding machine 2a. Using the data from (1) above and other data from the problem, compute the automated welding machine's net present value 2b. Would you recommend purchasing the automated welding machine? 3. Assume that management can identify several intangible benefits associated with the automated welding machine, including greater flexibility in shifting from one type of product to another, improved quality of output, and faster delivery as a result of redu throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in order to n the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Reg 3 Assume that management can identify several intangible benefits associated with the automated welding machine, including greater flexibility in shifting from one type of product to another, Improved quality of output, and faster delivery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these intangible benefits in order to make the new welding machine an acceptable investment? (Round your final answer to the nearest whole dollar amount.) Show less Minimum dollar value of intangible benefits