Assignment: AMD Construction and Negotiation
Read Case 3: AMD Construction in the text (pg. 448-450) and answer the following questions in a three- to -four page, APA formatted paper:
1. Discuss the various steps in the capital equipment acquisition process.
2. Develop a comprehensive analysis of the negotiations between Jane Axle and Tom Reed. (Provide a chart to show financial impacts.)
3. What is your assessment of the negotiations process, given what you have studied? What are your recommendations for Mr. Reed? You must justify your conclusions.
Suggestion of format for analysis:
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Current Machine
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CAT-1 machine-purchase
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CAT-1 machine - Lease
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Operating cost (without operators)
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Direct Labor
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Depreciation (straight line) 4 months
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Lease Expense 4 Months
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Interest expense at 8% for 4 months
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Salvage Value after 3 years
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Unexpected Costs
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Totals
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