1. What is the most you should pay for a new press given the following information: (10 points)

• Assume the cost of each non-conforming ball is $0.25
• Assume a single press runs 8 times per day
• Assume a single press runs 300 days per year
• Assume that the downtime per press is 3% a year with a cost of $3000 per day in lost sales and repair costs.
• Assume the remaining life of the current 4 machines are 3 years.
• Assume if you buy a new press its life is 10 years.
• Assume the non-conformance rate of a new press is 1/50^th of the current presses
• Assume the downtime of the new press is 0.5% a year (same cost per day in lost sales and repair costs).