Questions 1 & 2 ask for cash flows only, no present values. They are a critical part of the problem, but since the problem is primarily about capi points, and you have unlimited tries. Questions 3 & 4 require that you use the correct cash flows from 1 and 2 to determine the net present values of the two alternatives. You shou Coursepack. The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for $183 with a resulting contribution margin of $76. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends $40,000 a year to inspect the CD players. An average 1,470 of them are detected in the inspection process and are repaired for $85. If a defective CD player is not identified in the inspection process, the customer purchase price. The proposed quality control system involves the purchase of an X-ray machine for $210,000. The machine would last for four years and would have salvage va would also spend $450,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $23,000. This ne of defective units to 380 per year. 325 of these defective units would be detected and repaired at a cost of $44 per unit. Customers who still received defective 120% of the purchase price. Questions 1 & 2 [0 points; unlimited tries] 1. What is the Year 3 cash flow if Brisbane keeps using its current system? 19** Tries 0/99 2. What is the Year 3 cash flow if Brisbane replaces its current system? ** Tries 0/99 Questions 3 & 4 [5 points each; 5 tries each] [NOTE: When computing present values, use the present value factors from the tables on page 118 in the Coursepack] 3. Assuming a discount rate of 8%, what is the net present value if Brisbane keeps using its current system? * Tries 0/5 4. Assuming a discount rate of 8%, what is the net present value if Brisbane replaces its current system? ** Tries 0/5 Questions 1 & 2 ask for cash flows only, no present values. They are a critical part of the problem, but since the problem is primarily about capi points, and you have unlimited tries. Questions 3 & 4 require that you use the correct cash flows from 1 and 2 to determine the net present values of the two alternatives. You shou Coursepack. The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for $183 with a resulting contribution margin of $76. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends $40,000 a year to inspect the CD players. An average 1,470 of them are detected in the inspection process and are repaired for $85. If a defective CD player is not identified in the inspection process, the customer purchase price. The proposed quality control system involves the purchase of an X-ray machine for $210,000. The machine would last for four years and would have salvage va would also spend $450,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $23,000. This ne of defective units to 380 per year. 325 of these defective units would be detected and repaired at a cost of $44 per unit. Customers who still received defective 120% of the purchase price. Questions 1 & 2 [0 points; unlimited tries] 1. What is the Year 3 cash flow if Brisbane keeps using its current system? 19** Tries 0/99 2. What is the Year 3 cash flow if Brisbane replaces its current system? ** Tries 0/99 Questions 3 & 4 [5 points each; 5 tries each] [NOTE: When computing present values, use the present value factors from the tables on page 118 in the Coursepack] 3. Assuming a discount rate of 8%, what is the net present value if Brisbane keeps using its current system? * Tries 0/5 4. Assuming a discount rate of 8%, what is the net present value if Brisbane replaces its current system? ** Tries 0/5
