should use the present value tables on page 113 in the Coursepack. 11 ... The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for $187 with a resulting contribution margin of $76, Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends 541,000 a year to inspect the CD players. An average of 1,900 units turn out to be defective - 1,330 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 who receives it is given a full refund of the purchase price. The proposed quality control system involves the purchase of an X-ray machine for $180,000. The machine would last for four years and would have salvage value at that time of $21,000. Brisbane would also spend $430,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $20,000. Brisbane expects this new control system to reduce the number of defective units to 400 per year. 350 of these defective units would be detected and repaired at a cost of only $48 per unit. Customers who still receive defective players will be given a refund equal to 120% of the purchase price 3. Assuming a discount rate of 6%, what is the net present value if Brisbane keeps using its current system? Submit Answer Tries 0/5 4. Assuming a discount rate of 6%, what is the net present value if Brisbane replaces its current system? Submit Answer Tries 0/5 Threaded View Chronological View Other Views Exnart MOLLE 2 TALEPLUS 113 Table 1: Present Value of $1.00 996 296 396 469 WP CW SZO $ 0.042 796 0915 ONT con 0 000 OPRO 0971 VINO 1920 0.792 0.749 0713 SOCO o Period 194 1 0990 2 980 3 4 0.95 S 0.951 6 0942 7 0.910) 0.923 0 0.914 TO 0.009 11 OM 12 0.8? 13 0879 14 0.870 0980 09 0913 0.94 0906 O 0871 0.853 ORIT 20 0.804 0788 0771 0.75 5920 0991 0001 0.015 OS 0863 OR 0.813 0.789 0.766 0744 0.722 0.701 0.61 0.661 NO 0.855 022 0.790 0.70 0.731 0.701 0.676 0650 0.625 0801 0.377 8% 26 0857 0.794 0.733 061 0610 0.583 0.500 0 500 0.463 0429 0397 016 TRE 0.746 0.711 0.677 0.645 0.614 0.585 0.552 0.550 0021 0582 054 SON 0.475 0.444 0.415 TRR 0.427 0.592 0.558 0.527 0,497 0.869 0.442 10% 11% 12% 13% 1496 15% 0.69 0.901 08930 0.872 0.870 0.826 OXI2 0.797 0.73 0.900 0.7566 0.751 0.731 0.712 0.693 0.675 0.65 0.63 06:59 0636 06130.5920 572 0.621 0.567 0.543 0.519 0.497 0.566 0.535 0.507 0.480 0.456 0.432 0.513 0.482 0.452 0.425 0400 0376 0.467 0.434 0.404 0.376 0.351 0.327 0.424 0.391 0.361 0.333 O.JOR 0284 0.160.152 0322 0.1950.270 0.247 0.350 0317 0.27 0.261 0.237 0.215 0.319 0.136 0.257 0.231 020 0.187 0.290 0.258 0.229 0.204 0.182 0.163 0.263 0.232 0.205 0.1810.1600.141 DR42 0.772 0.00 0.650 0.596 0.542 0502 0.460 0.422 0388 156 0126 0.299 sos 0.340 Table 2: Present Value of an Annuity of $1.00 Period 1 2% 0.90 1% 0.990 1.970 2.941 3.902 0971 1.913 89 0.926 1.783 2.577 1 4 5 6 7 8 4% 0.962 1 886 2.775 3.60 4.452 5.242 60112 6711 7.435 &111 8760 9385 9.986 10.563 2. RR 3.08 4.713 $.601 6.472 7.325 8.162 8.91 9,787 10 575 11348 12.106 3.993 4.623 5.206 5.793 6.728 7.652 8566 9.471 10.368 11.255 12.134 13.004 3.717 4.580 5.417 6.230 7020 7.786 8.530 9.253 9.954 10,635 11.296 694 0.94 1.833 2.673 3.465 4212 4.917 5.5R2 6.210 6 02 7.360 7.887 8184 8853 9.295 0.992 1.859 2.721 3.546 4.329 5.076 5.786 6.463 710R 7.722 8.306 8.853 9.394 0899 7% 0.935 IOS 1624 3787 4,100 4,767 5.389 5.971 6.515 1.024 7,499 7.943 N.358 8.745 $.747 9% 0.917 1.250 2.531 3.240 3.890 4.486 5.033 $535 3.995 6.418 6 ROS 7.161 7.487 7.786 10% 11% 1394 15% 0.009 0.801 0.893 0.885 0.8770870 1.736 1.713 1.690 1.668 1.647 1626 2.487 2.444 2.402 23612.522 2.283 3.1703.102 3.037 2.97429142855 3.291 3696 3.605 3,517 3.433 3.352 4.355 4.231 3.998 3.8893.784 4.868 4.712 4.564 4.423 160 5.335 5.146 4. 4.7994,6394487 5.759 5.537 5328 3132 4.9464,772 6.145 5.89 5.650 5.426 5216 5.019 6.495 6.2075.938 5637 5.453524 6814 6.4926.194 $918 5.660 5.421 7.103 6.750 6.424 6.122 5.842 5.50 7.3676,982 6.628 6.303 5.724 10 11 12 6.217 6.710 7.139 7.536 7.904 8.244 13