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cap-budget-assignment-2017-bgnddaip.xls

Answered Same Day Mar 21, 2021

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Tanmoy answered on Mar 22 2021

142 Votes

Sheet1
    CAPITAL BUDGET EXAMPLE
            The production line produces a product which cu
ently has annual sales of $1,000,000 and has a contribution to the business beyound ingredients of $500,000
            Your line is cu
ently operating at full standard capacity
            You are putting in new equipment which will make the line more efficient and last for 10 years
            The equipment will increase the capacity of the line by 30%. - so add capability to produce $300,000 more per yea
            and will eliminate 3 positions of manual labor when fully operational the second yea
            A manual position of labor costs $30000 per year with benefits
            A 6 month supply of ingredients is kept at all times
            It is expected that the learning curve will result in zero increased capacity in year 1 but the full 30% in year 2
            The equipment will costs $600000
            engineering and installation will cost $100000
            Sales will grow at a rate so all production can be sold
            Advertising and promotion...

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