Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please fill in the chart below with the information provided: Please calculate the total variable cost for years 1-5 Option 1: buying 2 machines where
Please fill in the chart below with the information provided:
Please calculate the total variable cost for years 1-5
Option 1: buying 2 machines where each machine would cost $23,000 and the fixed cost of pro- duction would be $2,300 per machine, or Muhendis sells a unit produced is for $3. On the other side, raw materials cost $0.42 per unit produced and labor costs are $1.29 per unit produced, as well. Additionally, the installation fee is $2,000 per machine. These machines would last Muhendis for 10 years in an accounting sense (MACRS-10 classified), but you already found a suitable buyer for all the machines in the next 5 years so the project would end early in year 5. The buyers will pay 50% of the initial purchase price per machine as the salvage cost. Your supervisors suggest borrowing at a rate of 20% at an interest rate of %15 (effective per year). The loan would last 5 years. Company's MARR is given as 19% and the tax rate is 21%. Strategy department forecasted the next five year's demand as follows; 4 years 1 Demand 15000 2 16000 3 17000 5 19000 18000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started