QUESTION $1$

$5$ points

Johnny's Auto Services repairs damaged tires for three types of vehicles. The repair shop repairs multiple tires at a time. The processing time to repair tires depend on the size of the tire. The shop runs $220$ days a year with one $6\mathrm{.}5$ hour shift Johnny wants a $10\%$ capacity cushion, It currently has four tire balancing machines. Based on the following information provide the number of machines needed to repair the three different types of tires.

$\backslash$table$[[$ITEMS$,$tire size $1,$tire size $2,$tire size $3],[1.$ Annual Demand,$15000,22000,17500],[2.$ Standard Processing,$\mathrm{.}25,\mathrm{.}35,\mathrm{.}20],[$Time$,100,250,200],[3.$ Average Service Needs,$100,\mathrm{.}25,],[4.$ Standard Set$-$Up Time,$\mathrm{.}30,\mathrm{.}20,]]$

a$.$ What are the number of tire balancing machines is needed?

QUESTION $2$

$5$ points

An investment in the above machines will cost $$280,780($at year $0).$ In addition, the current capacity is $20,000$ tires. With the new machinces there would be a $5,000$ incremetnal increase inservice over the next six years with a $$4$ profit per tire.

b$.$ Based on the above information, what are the net present value of the cash flows from this project based on the next six years? $($Round answer to the nearest cent$).$

QUESTION $3$

$5$ points

c$.$ Should the tire shop invest in the new machines?

Yes, because the net present value is positive.

No$,$ because the net present value is to small.