System 75 Business plan Notes: Cost index? Wage index Union Rate Base Hr. Wage 2017 OT @ 1.5 Second Shift 1.15 base Third shift @1.2 base Building cost $/sqft PPI Electronics Mfg. 2.0%/yr. 30 45 34.5 36 Year -1% Index Cost 2001 2017 0.95 0.1 Learning curve MARR Year 159 170 ? Growth 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Given 0.04 0.03 0.10 0.10 0.10 0.10 0.20 0.50 0.25 -0.25 -0.25 -0.50 -0.75 -0.75 -0.75 -0.5 -1.00 0.00 350 System 75 Small 1500 1560 1607 1768 1945 2140 2354 2825 4238 5298 3974 2981 1491 373 94 24 12 0 0 Process information Process step Throughput PWB per Process yield hour w/ set-up, maint. and repair time Rev Cum Yield Output/yr./shift @ 2000 hrs./yr. PWB Line SM chips 10 99% 97% 20,000 Vapor solder 50 100% 98% 100,000 Insert dips Insert axials 30 40 99% 100% 98% 99% 60,000 80,000 Wave solder 50 99% 99% 100,000 PWB Test Repair 10 0.5 100% 100% 100% 20,000 1,000 Re test PWB equip 10 100% 20,000 What is the asset class? What is the depreciation schedule NET PV@5% $3,644,996 Learning curve applied to process step thru-put Process information Process step PWB Line SM chips Vapor solder Throughput PWB per hour w/ set-up, maint. and repair time 10 50 2017 2018 2019 1.00 0.95 0.95 10.0 50.0 10.5 52.6 Insert dips Insert axials Wave solder PWB Test Repair 30 40 50 10 0.5 30.0 40.0 50.0 10.0 0.5 31.6 42.1 52.6 10.5 0.5 Re test PWB equip 10 10.0 10.5 2017 1.00 30.00 2018 1.02 30.60 Second Shift 45.00 34.50 45.90 35.19 Second shift w/OT 51.75 52.79 Third shift 36.00 36.72 Third shift w/OT 54.00 55.08 Labor costs by shift 2000hrs/yr. Labor Index one shift One sift w/OT 2019 per yr. cost per sq ft Growth Given 0.05 0.03 0.10 0.20 0.20 0.20 0.25 0.25 0.20 0.10 0.05 -0.10 -0.25 -0.25 -0.25 -0.50 -0.50 0.00 System 75 Large 1000 1050 1082 1191 1430 1716 2060 2575 3219 3863 4250 4463 4017 3013 2260 1695 848 424 0 System 75 Small 75000 78000 Cost / Machine Index Shifts 1.02/yr. 2017 2018 175,000 183,000 SM chips 180357 188602 Completed good PWB needed/yr. at final step $ 250,000 TBD $ 300,000 TBD $ $ 35,000 TBD 25,000 TBD Vapor solder Insert dips 178554 186716 178554 186716 $ 400,000 TBD Insert axials 176768 184849 $ $ 2,000 TBD 1,000 TBD Wave solder PWB Test 176768 175000 184849 183000 $ 2,000 TBD Repair of PWB at Test =2% Re test PWB equip 3500 3500 3660 3660 Sample Calculation Total good needed/yield of the process For Wave solder PWB needed at wave solder in year 1; from BP requirements Needed for wave solder in year 1 176768 2020 2021 2022 2023 2024 2025 0.90 0.90 0.90 0.86 0.86 0.86 2020 2021 2022 2023 2024 2025 PWB Total Total Learning Factor System 75 Large 100000 105000 Cumulative Volume 175,000 183,000 175,000 183,000 175,000 358,000 2019 2020 2021 2022 2023 2024 2025 - - - - - - - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ded/yield of the process good needed 2500/yield of .99 ve solder in year 1 2026 2027 2028 2029 2030 2031 2032 0.81 0.81 0.81 0.81 0.81 0.81 0.77 2026 2027 2028 2029 2030 2031 2032 arning Factor Year 1.0 1 2.0 0.95 0.0 0.0 0.9025 0.0 0.0 0.0 0.857375 0.0 0.0 0.0 0.81450625 0.0 0.0 0.0 0.0 0.0 0.0 0.77378094 0.0 0.0 10 2017 2018 10.5263158 2019 2020 11.0803324 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2026 - 2027 2028 2029 2030 2031 2032 2033 - - - - - - - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2033 2034 2035 0.77 0.77 0.77 2033 2034 2035 2034 2035 #NAME? 2017 2018 Machines needed - PWB Line - Machines needed= PWB needed/hours/yr.* throug 9 184038/2000*10 0 Place SM chips 0 2 2 0 Vapor solder Insert dips 3 3 0 Insert axials 3 3 0 0 Wave solder PWB Test 2 9 2 9 0 0 Repair Re test PWB equip 4 1 4 1 34 33 4,062,960 3,815,460 10 Total Machine Single shift Cost Addition cost over prior year change in capital cost over prior year. Cost only for positive years $ one shift one shift Single shift PV of Capital cost over prior year Labor Single shift 1/machine 4,062,960 $ (247,500) $3,489,055 Cost of Labor one shift one shift see Labor. One operator / machine PV Single shift labor $3,523,636 one shift one shift one shift one shift Calculate from index and base year cost Year Building cost Pmt building Lease cost #VALUE! #VALUE! #VALUE! 34 33 $2,040,000 $2,019,600 Building cost 2010 = 100/ sqft 2017 index = 3 #VALUE! cost = $350/sqft #VALUE! one shift one shift one shift one shift one shift one shift one shift Lease Bond Annual Lease #VALUE! #VALUE! #VALUE! #VALUE! Lease increase 10 yrs Lease increase 15 yr. Annual cost with building #VALUE! Annual cost with lease #VALUE! Year 1 Year 2 Machines needed 2 Shift 2 Shift PWB Line 2 Shift Place SM chips 5 5 2 Shift Vapor solder 1 1 2 Shift Insert dips 2 2 2 Shift Insert axials 2 2 2 Shift Wave solder 1 1 2 Shift PWB Test 5 5 2 Shift Repair 2 2 2 Shift Re test PWB equip 1 1 2 Shift Total Machine 2 shift 17 17 2 Shift Cost Addition cost over prior year 2 Shift 2 Shift 2 Shift 2 Shift Two shift PV of Capital cost over prior year Labor Single shift 1/machine Cost of Labor First Shift $1,829,635 see Labor. One operator / machine $ change in capital 2,052,000 $ 1,907,730 cost over prior year. Cost only for positive years 2,052,000 $ (123,750) 0 0 $1,700,000 $1,736,842 PV Single shift labor 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift 2 Shift Cost of labor 2nd shift PV Second shift labor $2,980,861 see Labor. One operator / machine 1,997,368 5,100 4,950 $3,427,990 Total 2 shift labor Building cost Pmt building Lease cost 1,955,000 $ $ Lease Bond Annual Lease $ Lease increase 10 yrs $ Lease increase 15 $ yr. Annual cost with building $6,408,852 300 510,000 ($51,000) ($51,000) ($51,000) (51,000) (52,530) (54,106) ($874,849) Annual cost with lease ($874,849) Year 1 Place SM chips Vapor solder Insert dips Insert axials Wave solder PWB Test Repair Re test PWB equip Total Machine 3 shift Cost Addition cost over prior year 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift Machines needed PWB Line 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 shift PV of Capital cost over prior year Labor Single shift 1/machine Cost of Labor PV Single shift labor Second shift labor Year 2 3 3 1 1 1 1 1 1 1 1 3 3 1 1 1.0 1.0 12 12 change in capital 1,286,000 cost 1,369,333 $ over prior year. Cost only for positive 1,369,333 $ (83,333) years $209,787 12 #VALUE! 12 #VALUE! #VALUE! $ - $ - 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift 3 Shift Third shift labor $ Total 3 shift labor Building cost Pmt building Lease cost Lease Bond Annual Lease $ $ Lease increase 10 yrs $ Lease increase 15 $ yr. Annual cost with building Annual cost with lease $0 - $ $0 $ #VALUE! $ $0 $0 $0 - #VALUE! #VALUE! - $ $ - - $ - 2019 2020 2021 2022 2023 2024 Notice number of machines is reduced by one Machines needed= PWB machine because learning curve increased thruneeded/hours/yr.* through/hr. put by 5% 184038/2000*10 l cost over itive years - - - - - - $0 $0 $0 $0 $0 $0 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 - - - - - - - - - - - - Year 3 Year 4 $ - (1,286,000) $ #VALUE! $ - Year 5 - $ #VALUE! $ - Year 6 - $ #VALUE! $ - Year 7 - $ #VALUE! $ - Year 8 - $ #VALUE! $ - - #VALUE! $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ - $ - $ - $ - $ - $ - 2025 2026 2027 2028 2029 2030 - - - - - - $0 $0 $0 $0 $0 $0 #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 0 0 189,600 0 0 0 $0 $0 $0 $0 $0 $0 - - - - - - - - - - - - Year 9 Year 10 $ - $ #VALUE! $ - Year 11 - $ #VALUE! $ - Year 12 - $ #VALUE! $ - Year 13 - $ #VALUE! $ - Year 14 - $ #VALUE! $ - - #VALUE! $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ $ - $ - $ - $ - $ - $ - $ - 2031 2032 2033 2034 - - - - $0 $0 $0 $0 #VALUE! #VALUE! #VALUE! #VALUE! 2035 Deprecation schedule year 1 2 3 4 5 6 depreciation remove machines from place sm Year 15 Year 16 Year 17 Year 18 2 Shift 2 Shift PWB Line - - - - 2 Shift Place SM chips - - - - 2 Shift Machine 1 - - - - 2 Shift Machine 2 - - - - 2 Shift Machine 3 - - - - 2 Shift Machine 4 - - - - 2 Shift Machine 5 - - - - 2 Shift Machine 6 - - - - 2 Shift Machine 7 - - - - 2 Shift Machine 8 $ - $ - $ - $ - 2 Shift Machine 9 $ - $ - $ - $ - 2 Shift Machine 10 0 0 0 0 Machine 11 Machine 12 $0 $0 $0 $0 Machine 13 Machine 14 - - - - - - - - Year 15 Year 16 $ - $ #VALUE! $ - Year 17 - $ #VALUE! $ - Year 18 - $ #VALUE! $ - - #VALUE! $ - $ $ - $ $ - $ $ - $ $ - $ - $ - $ - $ - Deprecation schedule percent value 0.2 0.32 0.8 0.68 250000 250000 50000 80000 200000 120000 0.192 0.808 250000 48000 72000 250000 250000 250000 28800 28800 14400 43200 14400 0 0.1152 0.8848 0.1152 0.8848 0.0576 0.9424 machines from place sm chips Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Machines needed 5 5 0 0 0 0 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 250,000 $ 200,000 $ 120,000 $ 250,000 $ 200,000 $ 250,000 $ 200,000 $ 250,000 Year 7 Year 8 Year 9 0 Year 10 0 Year 11 0 Year 12 0 0 Year 13 0 Year 14 0 $ - $ - $ - $ - $ - $ 14,400 $ - $ 43,200 $ 14,400 $ - $ 72,000 $ 43,200 $ 14,400 $ $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ - $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ - $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ - $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 $ - - - 0 $ 250,000 $ 200,000 $ 120,000 $ 72,000 $ 43,200 $ 14,400 Remove from service Machine 11, 12, 13, 14 Total un used depreciation Value in Year 11 $ 379,200 $ 189,600.0 all other machines are fully depreciated Year 15 Year 16 0 Year 17 0 Year 18 0 0 $