Question 2 A technician in a quick oil change shop had the following service times (in minutes) for 12 randomly selected cars: a) Please choose the suitable control charts to test whether or not the process is in control. b) The specification for service time is between 4.1 minutes and 5.1 minutes, is the specification being met? Using the formulation =3nA2R ( n is sample size and A2 refers to tables below) to estimate the standard deviation from average range. Question 3 The company plans to get a new machine to increase its capacity. There are two machines can be selected: A and B. The lifetime of machine A or B is 5 years (value decrease to 0 at the end of year 5 ). The cash flows are shown below: a) basea on the payback rule, which Machine should the company buy? b) Based on the net present value, which Machine should the company buy? (Assume the k is 4%). For the $100000 investment, the company has two plans: - Plan A: use $40000 from the company and borrow $60000 from the bank to buy the machine. The borrowed money will be paid annually back to the bank (Equal loan payment) with an annual interest of 7% in 5 years. The maintenance is $5000 for each year paid by the company. - Plan B: lease the machine from the supplier with an annual payment of $25000 for first three years and purchase the machine at the end of year 3 for $40000. The maintenance fee for the first three years is paid by the supplier and for the last two years is $6000 annually (paid by the company). The tax rate is 40% and the depreciation is a straight line (same amount every year) and the machine worth nothing to the company after year 5 . The value decreases with a rate of 4% (k) annually. c) For the buying options, how much should the company pay back to the bank each year? And what is the tax saving for the year 2 ? d) For the leasing options, what is the NPV for the year 2's activities