Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem #1 (60 p): Mowasalat is considering between two alternatives for purchasing sensors to improve the monitoring of transport services in Qatar Alternative 1: Purchase

image text in transcribed
image text in transcribed
Problem #1 (60 p): Mowasalat is considering between two alternatives for purchasing sensors to improve the monitoring of transport services in Qatar Alternative 1: Purchase sensors at a cost of $30 per unit that can be used direety in he vehicles. Alternative 2: It can manufacture the sensors locally at $20 per unit. However, it needs to buy an electronic device today at $150,000. Labor and other operating costs are estimated to be $30,000 per year over the study period of 10 years. Salvage value is estimated at 10% of first cost and interest rate is 10% per year. Using the breakeven analysis, determine which alternative M owasalat should choose if the number of needed sensors is 5,500 each year. List of Useful Equations (You don't need to use all of these equations) F=P(1+i)n Constant-value dollars today's dollars- future dollars/(+0 ia = (1 + i)m-1 Effective i per time period (1/m)m -1 B/C- (B-D)/C Modified B/C (Benefits - Disbenefits- M&O Costs)/ Initial Investment or Cost) Profitability Index -NCF/Initial Investment R-)(O Profit - R-TC VC( (O TC FC + VC R (r) (Q) QBE (FC) /(r-v) By, = B-(t) (D) dmax = 2 / n d=dt = 1 Dr = (d) (BVt-i)-(d) (B) (1-d)t-1 B Vi = (B) (1-d)'-(BVt-1)-(D)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

7. List behaviors to improve effective leadership in meetings

Answered: 1 week ago

Question

6. Explain the six-step group decision process

Answered: 1 week ago