Subne "I'm not sure we should lay out $260,000 for that automated welding machine," said Jim Alder, president of the Superior Edpment Company "That's a lot of money and would cost us $75.000 for software and instalation, and another $3.500 every month just to maintain the thing in addition, the manufacturer admits that it would cost $42,000 more at the end of three years to replace wo-out parts" 1adnt ts a lot of money said Franc Rogers the controller But you know the turnover problem we've had with the welding crew This machine would replace six welders at a cost savings of $100 000 per year And we would save another $7,000 per year in reduced material waste. When you figure that the autonuried welder would last for six years, I'm sure there would be greater than our 20% required rate of retur I'm not convinced countered M Adet "We can only get $14,500 scrap value out of our old welding equipment if we set & now and in so years the new machine wit only be worth $25.000 parts but have your people work up the figures and we'll talk about them at the executive commitee meeting toesonow Click here to view Ext 0.1 and Exb02 to determine the appropriate discount tacking a Required 1 Compute the and net cost savings promised by the automated weting machine MA-p Reduction in labor costs S 109.000 Reduction in material waste 7,000 Total 116,000 Less increased maintenance costs Annual net cost savings $ 3,500 112.500 The automated welding machine 2a Using the data from (1) above and other data from the problem, compute the automated welding machine's net present aue (Any cash outflows should be indicated by a minus sign discount factors) to 3 decimal places.) 437 Now Cost of machine (260,000) Software and instatation (79.000) Salvage value of old equipment 14.500 Annual net cost savings 74,000 S 74.000 S Replacement of parts 74,000 $ (42.000) 74.000 S 74000 S 74.000 Savage value of new machine 25.000 Total cash flows S (324 500) $ 74.000 S 74,000 S 32.000 S 74.000 S 74.000 $ 99.000 Discount factor (20%) Cwar A Noreen CHA App A 4 Non CHOT,App GMT20220403-1.mp4 a Show all C ezlambeducation.com/hip PHISME FAK Net present value 5 0 2b Would you recommend purchasing the automated welding machine? Yes No 3. Assume that management can identify several intangible benefits associated with the automated welding machine, including greater flexibility in shifting from one type of product to anothe quality of output and faster delivery as a result of reduced throughput time. What dollar value per year would management have to attach to these intangible benets in order to make the ne machine an acceptable investment? (Enter all amounts as positive values. Round discount factor(s) to 3 decimal places.) Choose Numerator Intangle Denefit Chouse Denominator Intangible Benefits Intangible benefits yen CHOL App Noreen CHOBA Apptx CHI GMT22040-mp