Question

Q1- Dr. Cruz is thinking about buying two types of production systems to produce Lithium batteries...

Q1- Dr. Cruz is thinking about buying two types of production systems to produce Lithium batteries over 6 years: 1) a BDP system and 2) a GTT system. They produce the same number of pieces every year. On the basis of IRR criterion, which option should Dr. Cruz select? Please show all steps and work, thank you

Item

BDP

GTT

Annual O&M Costs

             Annual labor cost

$1,169,600

$707,200

             Annual material cost

832,320

598,400

             Annual overhead cost

3,150,000

1,950,000

             Annual tooling cost

470,000

300,000

             Annual inventory cost

141,000

31,500

             Annual income taxes

1,650,000

1,917,000

Investment

4,500,000

12,500,000

Net salvage value

$500,000

1,000,000

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT