Clark Paints

Data: Cost of new equipment 200,000 Expected life of equipment5 governance value in 5 grades 40,000 livelihood doing - lessen of cans 5,500,000 yearly production or procure needs 1,100,000 deem of workers needed 3 yearbook hours to be worked per employee 2,000 Earnings per hour for employees 12.00 one-year health benefits per employee 2,500 new(prenominal) yearbook benefits per employee - % of wages18% Cost of raw materials per can0.25 new(prenominal) variable production costs per can0.05 Costs to purchase cans - per can0.45 postulate rate of return12% tax revenue rate35% Cost to produce: feed leveraging one-year cost of direct materials: Need of 1,100,000 cans per year 330,000 Annual cost of direct labor for new employees reward 72,000 wellness Benefits 7,500 Other Benefits 12,960 thorough wages and benefits 92,460 Total annual production costs 422,460 Annual cost to purchase cans 495,000 dissever 1: Cash f lows over the life of the project in front valuateTax Effect afterwards Tax Item Annual cash savings (make vs buy) 72,540 0.

65 47,151 Tax savings due to wear and tear 32,000 0.35 11,200 Total annual cash flow 58,351 Part 2: requital period $200,000 / $58,3513.4years Part 3: Annual rate of return Accounting income as result of fall costs Annual cash savings (before tax effect) 72,540 slight Depreciation (32,000) forrader tax income 40,540 Tax at 35% rate (14,189) After tax Income 26,351 $26,351 / $200,00013.18% Part 4: electronic network stick ValueBefore taxAfter tax12% PVPres ent ItemYearamountTax % stepFactorValue Co! st of Machine0...If you want to get a full essay, target it on our website: OrderCustomPaper.com

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