Electronics blogs

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Determine how sensitive the decision to invest in the system is to the estimates of The RX Drug Company has just purchased a capsulating machine for $76,000. The plant engineer estimates the machine has a useful life of 5 years and little or no salvage value. He will use zero salvage value in the computations. Compute the depreciation schedule for the machine using: (a) Straight-line depreciation. (b) Sum-of-years'-digits depreciation. (c) Double declining balance depreciation.

The cost of tuition at public universities has been steadily increasing for many years. One Midwestern university pledged to keep the tuition constant for 4 years for all students who finished in the top 3% of their class. One such student who liked research planned to enroll at the university and continue there until earning a PhD degree (a total time of 9 years). If the tuition for the first 4 years will be $7200 per year and it increases by 5% per year for the next 5 years, what is the present worth of the tuition cost at an interest rate of 8% per year?

Bajhang Energy Company is considering two mutually exclusive projects, X and Y. Both projects have a life of 3 years. The expected cash flows are as follows. Use MARR= 10% per year. a) Check the feasibility of both the projects based on NPV and IRR measures.  b) Which project would you select and why?

Morris Glass Company has decided to invest funds for the next 5 years so that development of “smart” glass is well funded in the future. This type of new-technology glass uses electrochrome coating to allow rapid adjustment to sun and dark in building glass, as well as assisting with internal heating and cooling cost reduction. The financial plan is to invest first, allow appreciation to occur, and then use the available funds in the future. All cash flow estimates are in $1000 units, and the interest rate expectation is 8% per year. Years 1 through 5 (investment): Invest $7000 in year 1, decreasing by $1000 per year through year 5. Years 6 through 10: No new investment and no withdrawals. Years 11 through 15(withdrawal): Withdraw $20,000 in year 11, decreasing 20% per year through year 15. Determine if the anticipated withdrawals will be covered by the investment and appreciation plans. Use Present worth method.

What is the major disadvantage of payback period method of project selection? Given below are the two projects, Project A and Project B. Based on the payback period method, which project should be selected.

A firm is planning to manufacture a new product. The sales department estimates that the quantity that can be sold depends on the selling price. As the selling price is increased, the quantity that can be sold decreases. Numerically they estimate: P = $35.00 - 0.02Q, where P =selling price per unit, Q = quantity sold per year. On the other hand, the management estimates that the average cost of manufacturing and selling the product will decrease as the quantity sold increases. They estimate C = $4.00Q + $8000, where C = cost to produce and sell Q per year. The firm's management wishes to produce and sell the product at the rate that will maximize profit, that is, where income minus cost will be a maximum. What quantity should the decision makers plan to produce and sell each year?