Choices
Thermwood
1 Purchase of equipment (PE) 112,000
2 Installation and interfacing (IF) 5,000
3 Plant layout modification (PL) 10,000
4 Product Redesign (PR) 0
5 Hiring of skilled workers (SK) 0
6 Retraining of workers (RT) 5,000
Periodic Costs for each period (t)
1 Skilled labor costs (SL) 0
2 Energy cost for machines (EM) 500
3 Extra plant utility costs (PU), 400
4 Additional service costs (AS) 1,500
5 Maintenience costs (MC) 2,000
Periodic Benefits for each period (t)
6 Revenue for increased output (RO) 8,500
7 Savings from reduced labor (RL) 5,000
8 Savings from reduced inventories (RI) 1,500
9 Material savings(MS) 1,500
10 Savings in warranty related costs (WR) 1,500
11 Revenue from Better Market Position (MP) 5,000
Initial and Periodic Tax Effects
12 Investment tax credit (IT,t=0) 1,500
13 Depreciation Tax Shields (DT,t) 0
14 Taxes on net change in operating cashflows (TC, t) 0
SUMMARY
Initial acquisition costs at t=0 133,500
Periodic cost 4,400
Periodic benefits 23,000
Interes rate 0.67%
Number of periods 36
NVP 460,059.58
Final decision: select choice with highest positive
value. If no choice is positive, consider other
alternatives
Choices THERMWOOD ACCUROUTER
Accurouter Masak PERIODS Periodic cost Periodic benefits Periodic cost
125,000 150,000 1 4370.860927 22847.68212 1639.072848
15,000 10,000 2 4341.914828 22696.37297 1628.218061
12,000 7,000 3 4313.160425 22546.06586 1617.43516
0 0 4 4284.596449 22396.75417 1606.723668
0 0 5 4256.221638 22248.43129 1596.083114
5,000 6,000 6 4228.03474 22101.09069 1585.513027
7 4200.03451 21954.72585 1575.012941
0 0 8 4172.219712 21809.33031 1564.582392
450 250 9 4144.589118 21664.89766 1554.220919
500 400 10 4117.141508 21521.42152 1543.928065
2,500 500 11 4089.87567 21378.89555 1533.703376
1,500 500 12 4062.7904 21237.31346 1523.5464
13 4035.884504 21096.669 1513.456689
9,000 7,000 14 4009.156792 20956.95596 1503.433797
3,500 2,500 15 3982.606085 20818.16817 1493.477282
4,500 2,500 16 3956.23121 20680.29951 1483.586704
2,500 1,000 17 3930.031003 20543.34388 1473.761626
1,000 500 18 3904.004308 20407.29525 1464.001615
4,500 3,500 19 3878.149975 20272.14759 1454.30624
20 3852.466862 20137.89496 1444.675073
1,000 500 21 3826.953837 20004.53142 1435.107689
0 0 22 3801.609772 19872.05108 1425.603664
0 0 23 3776.433548 19740.44809 1416.16258
24 3751.424054 19609.71665 1406.78402
25 3726.580186 19479.85097 1397.46757
158,000 173,500 26 3701.900847 19350.84534 1388.212818
4,950 1,650 27 3677.384948 19222.69404 1379.019355
25,000 17,000 28 3653.031405 19095.39143 1369.886777
0.67% 0.67% 29 3628.839144 18968.93189 1360.814679
36 36 30 3604.807097 18843.30982 1351.802661
331,846.21 316,346.21 31 3580.934202 18718.51969 1342.850326
32 3557.219406 18594.55599 1333.957277
33 3533.661662 18471.41323 1325.123123
34 3510.259929 18349.08599 1316.347473
35 3487.013174 18227.56887 1307.62994
36 3463.920372 18106.85649 1298.970139
sum 140411.9442 733971.5267 52654.47909
ACCUROUTER MASAK
Periodic benefits Periodic cost Periodic benefits
16887.41722 1639.072848 16887.41722
16775.58002 1628.218061 16775.58002
16664.48346 1617.43516 16664.48346
16554.12264 1606.723668 16554.12264
16444.49269 1596.083114 16444.49269
16335.58877 1585.513027 16335.58877
16227.40606 1575.012941 16227.40606
16119.9398 1564.582392 16119.9398
16013.18523 1554.220919 16013.18523
15907.13764 1543.928065 15907.13764
15801.79236 1533.703376 15801.79236
15697.14473 1523.5464 15697.14473
15593.19013 1513.456689 15593.19013
15489.92397 1503.433797 15489.92397
15387.34169 1493.477282 15387.34169
15285.43877 1483.586704 15285.43877
15184.21069 1473.761626 15184.21069
15083.65301 1464.001615 15083.65301
14983.76127 1454.30624 14983.76127
14884.53106 1444.675073 14884.53106
14785.95801 1435.107689 14785.95801
14688.03775 1425.603664 14688.03775
14590.76598 1416.16258 14590.76598
14494.13839 1406.78402 14494.13839
14398.15072 1397.46757 14398.15072
14302.79873 1388.212818 14302.79873
14208.07821 1379.019355 14208.07821
14113.98497 1369.886777 14113.98497
14020.51487 1360.814679 14020.51487
13927.66378 1351.802661 13927.66378
13835.4276 1342.850326 13835.4276
13743.80225 1333.957277 13743.80225
13652.78369 1325.123123 13652.78369
13562.36791 1316.347473 13562.36791
13472.5509 1307.62994 13472.5509
13383.32871 1298.970139 13383.32871
542500.6937 52654.47909 542500.6937