fmp ex

7/28/2019 FMP ex

http://slidepdf.com/reader/full/fmp-ex 1/8

Replacement decision for printing machine

UnitS.no Defender

1Initial investment cost for printing machine 2years back $ 20000

2 Expected machine life

Year

s 5

3 Remaining life

Year

s 3

4 Expected salvage value $ 5000

5 Repair cost for last year $ 5000

6 Present operating cost

$/ye

ar 80007 Salvage value deducted to $ 2500

8 Book value of machine $ 14693

9 Market value of machine $ 10000

10 Interest rate % 0.12

Challenger

11 Investment cost $ 15000

12 Useful life

year

s 3

13 Annual Operating cost $ 600014 Salvage value of new machine $ 5500

15 Interest rate % 0.12

Option 1 : Keep the defender

Annual operating cost for next three years $ 8000

salvage value after three years $ 2500

Present worth of defender is sum of present worth of future salvage

value and present worth of future operating cost expenditures

Present worth of future salvage value $

Rs.

-1,779.45

Present worth of future operating cost

expenditure $

Rs.

-19,214.65

Present worth of defender $

Rs.

17,435.20

Annual equivalent cost for present worth $

Rs.

-7,259.13

Option 2 : Adopt new machine (challenger)

Defender can be sold for $ 10000

Cost of challenger $ 15000 Initial combines cash flow for this option $ 5000

7/28/2019 FMP ex


Present worth of new machine is sum of present worth of future

salvage value and present worth of future operating cost

expenditures

Present worth of future salvage value $

Rs.

-3,914.79

Present worth of future operating cost

expenditure $

Rs.

-14,410.99

Present worth $

Rs.

15,496.20

Annual equivalent cost for present worth $

Rs.

-6,451.83

Annual difference between defender and

challenger $

Rs.

807.30

Result

The annual equivalent cost for defender is more than

challenger with a difference of $807.20 which makes the

replacement decision in favour of challenger

7/28/2019 FMP ex


Anova: Single Factor

SUMMARY

GroupsCoun

t Sum Avera

geVariance

Mach 1 5124.6

5 24.93 1.0648

Mach 2 5113.0

5 22.61 0.778

Mach 3 5102.9

5 20.59 0.9205

ANOVA

Source of Variation SS df MS FP-

value F crit

Between Groups47.16

4 223.58

2 25.6024.68E-

053.8852

94

Within Groups11.05

32 120.921

1

Total58.21

72 14

7/28/2019 FMP ex


Anova: Two-Factor WithReplication

SUMMARY B1 B2 Total A1

Count 2 2 4

Sum 64 74 138

Average 32 37 34.5

Variance 8 3221.666

67

A2

Count 2 2 4

Sum 80 94 174Average 40 47 43.5

Variance 18 1828.333

33

Total

Count 4 4

Sum 144 168

Average 36 42

Variance 30 50

ANOVA

Source of Variation SS df MS FP-

value F crit

Sample 162 1 1628.5263

160.0432

447.7086

47

Columns 72 1 723.7894

740.1234

37.7086

47

Interaction 2 1 20.1052

630.7618

617.7086

47

Within 76 4 19

Total 312 7

7/28/2019 FMP ex


Models with Uncertainty (Stochastic Modeling)

Standard deviation, % 3Mean, % 25

S.No

Randomnumber

Probability

Z valueX = Zσ +

meanSystemCapacity

1 0.1531 -0.3469-

1.023106619 21.93068014 1.72

2 0.4018 -0.0982-

0.248723381 24.25382986 1.77

3 0.2910 -0.2090-

0.550581797 23.34825461 1.75

4 0.0369 -0.4631-

1.787589402 19.63723179 1.67

5 0.4346 -0.0654-

0.164676225 24.50597133 1.77

6 0.2788 -0.2212-

0.586552732 23.2403418 1.75

7 0.5496 0.0496 0.124541536 25.37362461 1.80

8 0.8092 0.3092 0.875017529 27.62505259 1.80

9 0.2110 -0.2890-

0.803105732 22.5906828 1.73

10 0.3240 -0.1760-

0.456594768 23.6302157 1.75

11 0.4649 -0.0351 -0.08801678 24.73594966 1.78

12 0.5974 0.0974 0.246733641 25.74020092 1.80

13 0.6046 0.1046 0.265362638 25.79608791 1.80

14 0.7678 0.2678 0.731661431 27.19498429 1.80

15 0.0479 -0.4521-

1.665098043 20.00470587 1.68

16 0.3896 -0.1104-

0.280243178 24.15927046 1.77

17 0.2718 -0.2282-

0.607462492 23.17761252 1.74

18 0.8410 0.3410 0.998444456 27.99533337 1.80

19 0.4304 -0.0696-

0.175425014 24.47372496 1.77

20 0.8505 0.3505 1.038393544 28.11518063 1.80

21 0.6820 0.1820 0.47334323 26.42002969 1.80

22 0.9201 0.4201 1.405664996 29.21699499 1.80

23 0.0682 -0.4318-

1.489449337 20.53165199 1.69

24 0.1551 -0.3449-

1.014730116 21.95580965 1.72

25 0.9851 0.4851 2.17155961 31.51467883 1.8026 0.7213 0.2213 0.586853353 26.76056006 1.80

7/28/2019 FMP ex


7/28/2019 FMP ex


0.448399897

991 0.6432 0.1432 0.366962414 26.10088724 1.80

992 0.4517 -0.0483-

0.121380953 24.63585714 1.78

993 0.6855 0.1855 0.48315881 26.44947643 1.80

994 0.9029 0.4029 1.298019912 28.89405974 1.80

995 0.8975 0.3975 1.267255206 28.80176562 1.80

996 0.0526 -0.4474-

1.620179844 20.13946047 1.68

997 0.6576 0.1576 0.405951562 26.21785469 1.80

998 0.1597 -0.3403-

0.995711518 22.01286544 1.72

999 0.7453 0.2453 0.659699189 26.97909757 1.80

1000 0.2702 -0.2298-

0.612090248 23.16372926 1.74

1001 0.7840 0.2840 0.78571289 27.35713867 1.80

7/28/2019 FMP ex


fmp ex

Documents