You must perform an after-tax analysis for each option (excluding Option 4). Let MARR be 15% and tax rate be 34%. Furthermore, you need to model the problem described in Option 3 with a decision tree. You can use any analysis method you want (PW, EUAW, IRR, B/C), but be careful with the difference in useful life of each option.

You work for the investment management department of Western Muskegon Machining and Manufacturing (WM), a highly successful machining and manufacturing company with many facilities in US. Your group has a budget of $1,000,000 and needs to decide which project(s) to invest among four mutually exclusive options which are described below. Option 1 The production manager and manufacturing engineer in the assembly department of WM3's facility in Tennessee have designed a new assembly fixture. The fixture will reduce the assembly time of a product from 38 minutes to 20 minutes per unit, saving $16.84 per unit in direct labor. The fixture will cost $200,000 to fabricate and can be ready by December 31, 2017 (assume the fixture is paid only when it is ready. The fixture will have a six year useful life if properly maintained. Its salvage value will be negligible, as its general usefulness is limited. In figuring the cost savings, the production manager points out that S88 of overhead is charged for each hour of direct labor. The manufacturing engineer points out that in this overhead charge are the fringe benefits and other payroll-related costs of 38.5%, which are incurred for each hour of direct labor, and that these costs are expected to increase by 1.5% per year. The other 61.5% of overhead charges account for other overhead. expenses, which are expected to increase by 4.5% per year The new operation will require an additional 100 ft2 of floor space. The space is available in an adjacent department, which recently reduced its requirements when it did a similar project. The assembly department will pay $15 annually per ft in the first year (2018). This cost is expected to increase at a general inflation rate of 2.5% per year for the next five years The product will have a demand of 2,500 units the first year (2018). There is some uncertainty on the demand over the next five years. Marketing believes that there is a 35 chance that demand will increase by 500 units per year until 2023. There is a 45% chance that demand will remain constant at 2,500 units until 2023. There is also a 20% chance that demand will be 1,500 units for the next two years and 1,000 for the next three years. You work for the investment management department of Western Muskegon Machining and Manufacturing (WM), a highly successful machining and manufacturing company with many facilities in US. Your group has a budget of $1,000,000 and needs to decide which project(s) to invest among four mutually exclusive options which are described below. Option 1 The production manager and manufacturing engineer in the assembly department of WM3's facility in Tennessee have designed a new assembly fixture. The fixture will reduce the assembly time of a product from 38 minutes to 20 minutes per unit, saving $16.84 per unit in direct labor. The fixture will cost $200,000 to fabricate and can be ready by December 31, 2017 (assume the fixture is paid only when it is ready. The fixture will have a six year useful life if properly maintained. Its salvage value will be negligible, as its general usefulness is limited. In figuring the cost savings, the production manager points out that S88 of overhead is charged for each hour of direct labor. The manufacturing engineer points out that in this overhead charge are the fringe benefits and other payroll-related costs of 38.5%, which are incurred for each hour of direct labor, and that these costs are expected to increase by 1.5% per year. The other 61.5% of overhead charges account for other overhead. expenses, which are expected to increase by 4.5% per year The new operation will require an additional 100 ft2 of floor space. The space is available in an adjacent department, which recently reduced its requirements when it did a similar project. The assembly department will pay $15 annually per ft in the first year (2018). This cost is expected to increase at a general inflation rate of 2.5% per year for the next five years The product will have a demand of 2,500 units the first year (2018). There is some uncertainty on the demand over the next five years. Marketing believes that there is a 35 chance that demand will increase by 500 units per year until 2023. There is a 45% chance that demand will remain constant at 2,500 units until 2023. There is also a 20% chance that demand will be 1,500 units for the next two years and 1,000 for the next three years