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Kamaplast, a Lebanese manufacturing Company, is considering the purchase of a new plastic press. The press is capable of producing 120,000 units per year. 2.5%
Kamaplast, a Lebanese manufacturing Company, is considering the purchase of a new plastic press. The press is capable of producing 120,000 units per year. 2.5% of the units produced are considered defective. Nondefective (good) units can be sold for 0.5$ per good unit, however, rejected (defective) units can be so as scrap for $0.1 per unit. If purchased, the press will cost $32,000 each; estimated annual operation and maintenance and other related expenses are $25,150. Kamaplast elects, MACRS-GDS, with half year convention with a recovery period of 5years. The analysis period is five years; tax rate =30%; after-tax MARR =10% per year; and the estimated MV at the end of five years is 20% of the purchase price of the press. Table 1-below represent the Cash Flow for each press a. Determine the BTCF .(2.5pts) b. Determine the missing depreciation values of the asset. (1pts) c. What is the book value of the asset at the end of year 5 ( year of disposal) ?(1pt) d. What is the Gain or Loss on disposal? (1pt) e. Complete the missing data concerning the taxable income, income tax and determine the ATCF for the given investment.(2.5pts) f. Calculate the NPV of the capital investment? (1.5pt) g. As a technical engineer, is the investment justified? (0.5pt)
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