Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Saxon Products, Incorporated, is investigating the purchase of a robot for use on the company's assembly line. Selected data relating to the robot are provided

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Saxon Products, Incorporated, is investigating the purchase of a robot for use on the company's assembly line. Selected data relating to the robot are provided below: Cost of the robot $ 1,850,000 Installation and software $ 435,000 Annual savings in inventory carrying costs $ 228,000 Annual increase in power and maintenance costa $ 48,000 Salvage value in 5 years $ 77,000 Useful life 5 years In addition to the data abqve, engineering studies suggest that use of the robot will result in a savings of 29,000 direct labor-hours each year. The labor rate is $15 per hour. Also, the smoother work flow made possible by the use of automation will allow the company to reduce the amount of inventory on hand by $418,000. This inventory reduction will take place at the end of the first year of operation, the released funds will be available for use elsewhere in the company, Saxon Products has a 17% required rate of return Click here to view Exhibit 148_1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation) 2-a. Compute the net present value of the proposed investment in the robot. 2-b. Based on these data, would you recommend that the robot be purchased? 3-a Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this Investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return Complete this question by entering your answers in the tabs below. - . RIA Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg 3A Reg 38 Req 4A Reg 4B Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation.) Annual net cost savings e Real Req 2A > Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418.000 Inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed investment in the robot. 2-b. Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-b. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. Complete this question by entering your answers in the tabs below. Reg 1 Roq ZA Req 2B Req 3A Reg 38 Req 4A Req 4B Compute the net present value of the proposed Investment in the robot. (Round your final answer to the nearest whole dollar amount.) Net present value Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value In this computation.) 2-a. Compute the net present value of the proposed investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year , rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. Complete this question by entering your answers in the tabs below. Reg 4B Req 1 Reg 2A Reg 2B Reg 3A Req 3B Req 4A Based on these data, would you recommend that the robot be purchased? Yes ONO Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed Investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Reg 28 Req 3B Req 4A Reg 4B Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Show less Net present value Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 Inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed Investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Reg 28 Reg 3A Reg 38 Reg 1A Req 48 Does it appear that the company made a wise Investment? OYes ONO Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 28 Reg 3A Req 3B Red A Req 4B Which of the following are intangible benefits associated with the new automated equipment? (Select which of the following statements (is) are true by selecting an "X".) Reduction in inventories Greater throughout Increase in inventories Greater variety of products Higher quality Reduced cost per unit of raw material Required: 1. Determine the annual net cost savings if the robot is purchased (Do not include the $418,000 inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed Investment in the robot. 2-b, Based on these data, would you recommend that the robot be purchased? 3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Does it appear that the company made a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-6. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 28 Req Req 3B Req 4A Ruta 48 Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return. (Round your final answer to the nearest whole dollar amount.) Amount of annual cash Intlow

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental accounting principle

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

21st edition

978-0078025587

Students also viewed these Accounting questions

Question

Describe the procedure for depositing checks.

Answered: 1 week ago

Question

Complete petty cash vouchers and petty cash payments records.

Answered: 1 week ago

Question

Record journal entries to establish and reimburse Petty Cash Fund.

Answered: 1 week ago