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A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,550,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of about $200,000. If the company's MARR is 18%, use the NPW method to justify the project. Equal Payment Series Present Compound Amount Factor Single Payment Present Worth Factor Compound Amount Factor Sinking Fund Factor Worth Capital Recovery Factor (A/P, i, N) Factor (P/F, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) (F/P, i, N) 1.1800 0.8475 1.0000 1.0000 0.8475 1.1800 1.3924 0.7182 2.1800 0.4587 1.5656 0.6387 0.6086 3.5724 0.2799 2.1743 0.4599 1.6430 1.9388 0.5158 5.2154 0.1917 2.6901 0.3717 2.2878 0.4371 7.1542 0.1398 3.1272 0.3198 6 2.6996 0.3704 9.4420 0.1059 3.4976 0.2859 7 3.1855 0.3139 12.1415 0.0824 3.8115 0.2624 8 3.7589 0.2660 15.3270 0.0652 4.0776 0.2452 9 4.4355 0.2255 19.0859 0.0524 4.3030 0.2324 10 5.2338 0.1911 23.5213 0.0425 4.4941 0.2225 The NPW of the project is $thousand. (Round to the nearest whole number. ZI~ 3&50 N 1 2 4

A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,550,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of about $200,000. If the company's MARR is 18%, use the NPW method to justify the project. Equal Payment Series Present Compound Amount Factor Single Payment Present Worth Factor Compound Amount Factor Sinking Fund Factor Worth Capital Recovery Factor (A/P, i, N) Factor (P/F, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) (F/P, i, N) 1.1800 0.8475 1.0000 1.0000 0.8475 1.1800 1.3924 0.7182 2.1800 0.4587 1.5656 0.6387 0.6086 3.5724 0.2799 2.1743 0.4599 1.6430 1.9388 0.5158 5.2154 0.1917 2.6901 0.3717 2.2878 0.4371 7.1542 0.1398 3.1272 0.3198 6 2.6996 0.3704 9.4420 0.1059 3.4976 0.2859 7 3.1855 0.3139 12.1415 0.0824 3.8115 0.2624 8 3.7589 0.2660 15.3270 0.0652 4.0776 0.2452 9 4.4355 0.2255 19.0859 0.0524 4.3030 0.2324 10 5.2338 0.1911 23.5213 0.0425 4.4941 0.2225 The NPW of the project is $thousand. (Round to the nearest whole number. ZI~ 3&50 N 1 2 4

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
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Problem 28P: Friedman Company is considering installing a new IT system. The cost of the new system is estimated...
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A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,550,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of about $200,000. If the company's MARR is 18%, use the NPW method to justify the project. Equal Payment Series Sinking Present Compound Amount Factor Fund Single Payment Compound Present Amount Worth Factor (F/P, i, N) 1.1800 Worth Capital Recovery Factor Factor Factor Factor N (P/F, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1 0.8475 1.0000 1.0000 0.8475 1.1800 2 1.3924 0.7182 2.1800 0.4587 1.5656 0.6387 3 1.6430 0.6086 3.5724 0.2799 2.1743 0.4599 4 1.9388 0.5158 5.2154 0.1917 2.6901 0.3717 5 2.2878 0.4371 7.1542 0.1398 3.1272 0.3198 6 2.6996 0.3704 9.4420 0.1059 3.4976 0.2859 7 3.1855 0.3139 12.1415 0.0824 3.8115 0.2624 8 3.7589 0.2660 15.3270 0.0652 4.0776 0.2452 9 4.4355 0.2255 19.0859 0.0524 4.3030 0.2324 10 5.2338 0.1911 23.5213 0.0425 4.4941 0.2225 The NPW of the project is $ thousand. (Round to the nearest whole number.)
Transcribed Image Text:A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing $3.5 million to purchase the industrial-strength lasers. The system will save $1,550,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $350,000. Annual income taxes will also increase by $150,000. The system is expected to have a 10-year service life and will have a salvage value of about $200,000. If the company's MARR is 18%, use the NPW method to justify the project. Equal Payment Series Sinking Present Compound Amount Factor Fund Single Payment Compound Present Amount Worth Factor (F/P, i, N) 1.1800 Worth Capital Recovery Factor Factor Factor Factor N (P/F, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1 0.8475 1.0000 1.0000 0.8475 1.1800 2 1.3924 0.7182 2.1800 0.4587 1.5656 0.6387 3 1.6430 0.6086 3.5724 0.2799 2.1743 0.4599 4 1.9388 0.5158 5.2154 0.1917 2.6901 0.3717 5 2.2878 0.4371 7.1542 0.1398 3.1272 0.3198 6 2.6996 0.3704 9.4420 0.1059 3.4976 0.2859 7 3.1855 0.3139 12.1415 0.0824 3.8115 0.2624 8 3.7589 0.2660 15.3270 0.0652 4.0776 0.2452 9 4.4355 0.2255 19.0859 0.0524 4.3030 0.2324 10 5.2338 0.1911 23.5213 0.0425 4.4941 0.2225 The NPW of the project is $ thousand. (Round to the nearest whole number.)
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