"I'm not sure we should lay out $260,000 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 $77,000 for software and installation, and another $39,600 per year just to maintain the thing. In addition, the manufacturer admits it would cost $40,000 more at the end of three years to replace worn-out parts:" 7 admit it's a lot of money." said Franci 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 $107,000 per yeat. And we would save another $6,800 per year in reduced material waste. When you figure that the automated welder would last for six years, l"m sure the return would be greater than out 19% required rate of return," "I'm still not convinced," countered Mr. Alder. "We can only get $13,500 scrap value out our old welding equipment if we sell it now, and in six years the new machine will only be worth $23,000 for parts. But have your people work up the figures and we'll talk about them at the executive committee meeting tomorrow" Click here to view Exhiblt 78-1 and Exhibit 78-2, 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 Required 1 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 flexibllity in shifting from one type of product to another, improved quality of output, and faster dellvery as a result of reduced throughput time. What minimum dollar value per year would management have to attach to these intangible lyenefits in order to make the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Required: 1. Compute the annual net cost savings promised by the automated welding machine. 2a. Using the data from Required 1 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 severat 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. Compute the annual net cost savings promised by the automated welding machine. Required: 1. Compute the annual net cost savings promised by the automated weiding machine. 2a. Using the data from Required 1 and other data from the problem, compute the automated welding machine's net present value. 2b. Would you recommend purchasing the automated wolding 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 qualify of output, and faster delivery as a result of reduced throughput time. What minimum doliar 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. Using the data from Required 1 and other data from the problem, compute the automated weiding machine's net present value. Note: Enter negative amount with a minus sign, Round your final answer to the nearest whole dollar ampunt. Required: 1. Compute the annual net cost savings promised by the automated welding machine. 2a. Using the data from Required 1 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 intanglble benefits in order to make the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Would you recommend purchasing the automated welding machine? Would you recommend purchasing the automated wolding machine? Required: 1. Compute the annual net cost savings promised by the automated welding machine. 2a. Using the data from Required 1 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 intanglble benefits in order to make the new welding machine an acceptable investment? Complete this question by entering your answers in the tabs below. Assume that management can identify several intangible benefits associated with the automated welding machine, including greater fexiblity 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? Note: Round your final answer to the nearest whole dollar amount
