Im not sure we should lay out $285,000 for that automated welding machine, said Jim Alder, president of the Superior Equipment Company. Thats a lot of money, and it would cost us $81,000 for software and installation, and another $44,400 per year just to maintain the thing. In addition, the manufacturer admits it would cost $44,000 more at the end of three years to replace worn-out parts. I admit its a lot of money, said Franci Rogers, the controller. But you know the turnover problem weve had with the welding crew. This machine would replace six welders at a cost savings of $111,000 per year. And we would save another $7,200 per year in reduced material waste. When you figure that the automated welder would last for six years, Im sure the return would be greater than our 14% required rate of return. Im still not convinced, countered Mr. Alder. We can only get $15,500 scrap value out of our old welding equipment if we sell it now, and in six years the new machine will only be worth $27,000 for parts. But have your people work up the figures and well talk about them at the executive committee meeting tomorrow. Click here to view Exhibit 13B-1 and Exhibit 13B-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 machines 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?

chagter 13-Homework Ch13 Resource Files (Optional ch 13 Homewcrkpd x https/cwconnect.mhoducation.com/flow/connect.htm wwkipedia News Popular MMcGra-Hill Con.. A add Edition-h JTPart Slepe fam.. Eam1Ch 1,2,31 el Stars Record Apple Chapter 13-Homework Saed Help Save& Exit Submis Check my work 3 "Im net sure we should lay out $285.000 fcr that autormaled welding machine" said Jim Alder, president of the Superior Cauipment Company. Thats a lot of money. and it would cost us S81,000 for 5oftware and installatlon, and another 544400 per year Just to parts." 36.68 pumts "l 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 mechine wuld replace sik welders aa cost savings of sm.u per year And we would saveandther s7200 per year in reaucd required rate of return. "I'm still not convinced," countered Mr. Alder. "We can only get $15,500 scrap value out of our old welding equipment if we sell it now, and in sox yeors the new machine wll only be worth S27000 for pans. But have your people work up the taures and we'll talk about mmittee meetig Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factoris) using tables Referencer Required: eannual net cast savings promised by the autamated welding machine. a. Using the data from (T) above and other data from the problem, compute the automated welding machine's net present value. t anerent.cn identife severel intangible beneits associated with the eutomated weldirng mechine, including y e type of product to anctner, Improved qualty of oulpul did raster delvery as a resUt e e management the new welding machine an acceptable investment? Complete this question by entering your answers In the tabs below Req Req 2A Reu 2B Req Computa the annual net cost savings promisod by the automated welding machine Annual net cost savings Rey 2A Re 1 R W Wdows 3 of 3 i Graw