Injection molding machines are needed to be replaced at a


Injection molding machines are needed to be replaced at a company. The list is narrowed down to two options based on various parameters like screw diameter, injection pressure, injection capacity, rate, and screw rpm and so on. Take a look at the specs and make a recommendation. The Cincinnati Milacron Plastic Injection Molding Machine costs $80,000 and the Kawaguchi machine costs $120,000. Based on the capacity of these machines, it can be safely estimated that the revenue for Cincinnati will be $30,000 for year 1 and $41,500 for Kawaguchi. It is also assumed that the capacity could be increased and thereby the revenue by 20% for the next few years. The maintenance costs will be $2,000 and the amount will increase by $5,000 each year for the next few years. It can be assumed that the maintenance is the same for both machines. In talking with other companies who use these machines, these machines are capable of producing products for 5 years before major breakdowns occur. Since this is a rough estimate, you can use straight line depreciation. Tax rate for this company is 40%. Assume a MARR of 15% and calculate the PW of the after tax cash flow. Also, perform a sensitivity analysis on MARR with plus or minus 5%. (Use a DATA TABLE)

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Injection molding machines are needed to be replaced at a
Reference No:- TGS01082411

Expected delivery within 24 Hours