Please answer just number 2 A company is looking...
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Please answer just number 2
A company is looking at two machines to do the same work. The newer version of the machine costs more but also does more. Both machines require a second machine to finish the fabrication process, but the newer machine is projected to cut the second process cost in half ew Machine $187,000 $135,000 $20,000 $43,000 Old Machine $47,000 $135,000 $60,000 $87,000 Initial Cost Direct Labor on Machines Second Machine Initial Cost Second Machine Labor per Year Labor on the Second Machine is assumed to increase at 5% of the first year's value per year Overhaul-Year 4 Overhaul- Year 5 Salvage Value Time period Interest Rate $12,000 $35,000 $18,750 $4,700 8 years 8 years 15% 15% 1. New machine: (max. 40 points) (a) Draw cash flow (b) Compute gradient for second machine (c) Compute labor disbursement (d) Compute present worth including costs, labor disbursement, gradient, overhaul and salvage value 2. Repeat procedure for old machine: (max. 40 points) (a) Draw cash flow (b) Compute gradient for second machine (c) Compute labor disbursement (d) Compute present worth including costs, labor disbursement, gradient, overhaul and salvage value 3. (20 points) Write your conclusion
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