question2

b) An aggressive marketer of a new office copier has made its machine available for sale as well as lease. The idea of buying a copying machine seems revolutionary, but less so when we examine our present costs, which come to $6,500 per year for lease plus per copy charges of 2 cents per page. If we own a machine, the cost of paper and maintenance is projected to be $1,500 per year. The new copier costs $10,000, installed, and is assumed to have an economic life of five years and a salvage value of $2,000. (assume 50,000 pages per year). i) What is the projected unadjusted rate of return if we install the copier? ii) If incremental taxes for the project are $1,000, what is the adjusted rate of return? (a) After inspection of 750 manufactured parts, it is found they fall into a normal distribution. How many parts will be within plus or minus three sigma? (b) A cast-iron compressor body requires 152 operations consisting of 50 holes drilled, 12 bored, 38 co- sunk, 36 tapped, and 16 surfaces milled. These operations can be done on NC machining centres in 1 hr/piece at a rate of $40/hr. Programming and setup costs are negligible. Conventional machines may be tooled for the job at a cost of $300,000. The annual charge for the tools is $130,000, and the rate on the machines is $24/hr, including labor and overhead. It is estimated that about 1 hour will be required per piece by this method. A transfer machine to produce 188 pieces/hr will cost $1,800,000 with an annual charge of $800,000. Labor and overhead rate is $16/hr. For what quantities is each method suitable? b) An aggressive marketer of a new office copier has made its machine available for sale as well as lease. The idea of buying a copying machine seems revolutionary, but less so when we examine our present costs, which come to $6,500 per year for lease plus per copy charges of 2 cents per page. If we own a machine, the cost of paper and maintenance is projected to be $1,500 per year. The new copier costs $10,000, installed, and is assumed to have an economic life of five years and a salvage value of $2,000. (assume 50,000 pages per year). i) What is the projected unadjusted rate of return if we install the copier? ii) If incremental taxes for the project are $1,000, what is the adjusted rate of return? (a) After inspection of 750 manufactured parts, it is found they fall into a normal distribution. How many parts will be within plus or minus three sigma? (b) A cast-iron compressor body requires 152 operations consisting of 50 holes drilled, 12 bored, 38 co- sunk, 36 tapped, and 16 surfaces milled. These operations can be done on NC machining centres in 1 hr/piece at a rate of $40/hr. Programming and setup costs are negligible. Conventional machines may be tooled for the job at a cost of $300,000. The annual charge for the tools is $130,000, and the rate on the machines is $24/hr, including labor and overhead. It is estimated that about 1 hour will be required per piece by this method. A transfer machine to produce 188 pieces/hr will cost $1,800,000 with an annual charge of $800,000. Labor and overhead rate is $16/hr. For what quantities is each method suitable