1. The company Cintas Adhesivas del Norte, S.A. wants to expand its production capacity in response to an increase in demand. For this purpose, it has initiated the respective investigations and has found that the available alternatives are: (a) Acquire a cutting machine in the US, at a cost of $1,000,000. This type of machine can cut at a rate of 1,000 m2/hour and requires a person whose hourly wage is $50 to operate it; and (b) Purchase 2 cutting machines in Germany at a cost of $350,000 each. This type of machine has a cutting rate of 500 m2/hour and requires one person (per machine) whose salary is $30/hour to operate it. Consider that the equipment has a life of technological use of 10 years, at the end of which the salvage value is estimated to be equal to 15% of the original purchase value of the equipment. Slicer EE. UU. Slicer Alemania INSURANCE COST/YEAR $80,000 $50,000 FIXED COST OF OPERATION/YEAR $10,000 $7,000 VARIABLE COST OF OPERATION/HOUR $3 $4 COST OF ENERGY CONSUMPTION/HOUR $8 $5 Given the expected demand in the next 10 years, the company estimates that an annual production of 5,000,000 m2 will be required for those 10 years. Report the cost of operation expressed in NPV of each of the alternatives, and select the best course of action for the company if the MARR is 25% per year
1. The company Cintas Adhesivas del Norte, S.A. wants to expand its production capacity in response to an increase in demand. For this purpose, it has initiated the respective investigations and has found that the available alternatives are: (a) Acquire a cutting machine in the US, at a cost of $1,000,000. This type of machine can cut at a rate of 1,000 m2/hour and requires a person whose hourly wage is $50 to operate it; and (b) Purchase 2 cutting machines in Germany at a cost of $350,000 each. This type of machine has a cutting rate of 500 m2/hour and requires one person (per machine) whose salary is $30/hour to operate it. Consider that the equipment has a life of technological use of 10 years, at the end of which the salvage value is estimated to be equal to 15% of the original purchase value of the equipment.
|
Slicer EE. UU. |
Slicer Alemania |
|
|
INSURANCE COST/YEAR |
$80,000 |
$50,000 |
|
FIXED COST OF OPERATION/YEAR |
$10,000 |
$7,000 |
|
VARIABLE COST OF OPERATION/HOUR |
$3 |
$4 |
|
COST OF ENERGY CONSUMPTION/HOUR |
$8 |
$5 |
Given the expected demand in the next 10 years, the company estimates that an annual production of 5,000,000 m2 will be required for those 10 years. Report the cost of operation expressed in NPV of each of the alternatives, and select the best course of action for the company if the MARR is 25% per year?
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