Please present cashflow diagrams, equvalence models, y show procedure. Please Do
ID: 384944 • Letter: P
Question
Please present cashflow diagrams, equvalence models, y show procedure. Please Dont paste excel tables guys!
Explanation / Answer
As it mentioned in the passage, “Engineered Products Inc ., is a conglomerate with both manufacturing and service based businesses. One of EPI’s larger manufacturing plants has been asked to increase its recycling efforts or face a major increase in its disposal fee.”
We know that the plant works 5 days in a weak, 50 weeks in a year. In other words, it works 20 days in a month (5 x 4=20 days), 240 days in a year (20 x 12= 240 days).
The minimum attractive rate of return = 15 percent.
At present,
The average sending of containers to the landfill (per day) = 2
The average tons of waste that can be loaded in a container = 10 tones
i.e., 2 containers carries = 2x 10= 20 tones
In future,
The average weight for each container could be increase to 11 tones.
That means, 2 containers will carry = 2x 11 tones= 22tones
As per the local landfill plans, disposal fees would increase by $5/ton. It is also offering to rebate $5/ton less than the annual average (12 months) that the plant sends for the landfill.
Tons per day
Tons per week
Tons per month
Tons per year
At present
20
5x20= 100
100x4=400
400 x 12= 4800
In future
22
5x22= 110
110x4= 440
440x12=5280
Variation
5280-4800= 480 tons/year
Increased disposal fee,
2400 $ / per year = 4800 $ in a year
The present landfill charges for receiving the waste = $40 per ton
The present landfill charge to receive the waste of 20 tons per day at present
= $40 X 20 tons = $800
The present landfill charge to receive the waste of 4800 tons per year
= $40x 4800 tons = $ 1,92,000
In future, landfill charge to receive the waste of 22 tons per day at present
= $40 X 22 tons = $880
The present landfill charge to receive the waste of 5280 tons per year
= $40x 5280 tons = $ 2,11,200
The transport charges for waste hauler are $80/load (for one container). At present, three containers are transporting the waste for rent amount equal to $5 per container in each day. Then,
The waste hauler charge for 2 containers per day = 2 x $ 80= $ 160
The waste hauler charge for 2 containers per year = 12 x $ 3,200 = $ 38,400
The rental cost for 2 containers per day= 2x $5 = $ 10
The rental cost for 2 containers per year=12x $200= $ 2400
At present, the shipment of collected and bundles cardboard can be sold out for $95/ton. As per the data, 2 tons of cardboard sends to the landfill in each day.
Therefore,
The sale of cardboard per day = 2x $ 95 = $ 190
The sale of cardboard per year = 12 x $ 3,800 = $ 45,600
To collect the cardboard will require one janitorial associate for 3 hours per day at a cost of $18.50 per hour.
That means,
Per day = $ 555 , and
Per year = $ 13320
“The baling equipment will cost $22,000 installed, $45 per week to operate, $4500 per year to
maintain, and last 12 years. The equipment will have a salvage value of $5000.”
Therefore,
$ 6,750 per year = $8166,67 in a year
$ 22,000 0th year
$ 5,000 12th year
As per the given information, 25,000 wooden pallets are scrapped per year due to the damage or because they are mismatch to the standard size used by the plant. The plants has allotted budget of $ 12,000 for a pallet shredder to chip the pallets as they go into the waste containers.
The average weight of a pallet = 13 pounds
1 ton = 2240 pounds
The operation and maintenance cost = $ 3,000/year
(Excluding the operator and janitorial associate cost)
The machine shredder has not hold any salvage value at the end of 6 years of continuous usage.
Thatmeans,
$12,000 in 0th year
$ 12,000 in 6th year
$ 3,000 in a year = $5,000 in a year
1,45,089 tons in a year
“A pallet recycler has offered to purchase pallets, which are of certain sizes and in good
condition. The pallets that are in these sizes and in acceptable condition amount to half the
scrapped pallets. The pallet recycler is offering to pay $1.00 per pallet. To sort the acceptable
sizes from the scrap pallets will require three hours of labor per day.”
$ 12,500 per year = $ 12,500 per year
$ 555 per day = $ 13,320 per year
“Purchasing has identified a company that will pick up the damaged and unusable pallets
them into wood chips, which this company then sells. The cost of this service is $1.25 per pallet.”
$ 15,625 per year
Total Cost
$ 31,22,317 per year
Total Benefit/Advantage
$58,100 per year
Recommendation
Plant do not do anything
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