[pnj]

I have an assignment, a book that cost $100.00 and it is of no use.

I have made a google.doc of this ass.

https://spreadsheets.google.com/ccc?key=tn89tvEVL-edKjMwzSbd15A&hl=en&authkey=CK61xtAK#gid=0

For the first one, I have no clue.

The other three seem simple but I do know exactly where to start.

Google isn't helping me.

 

[stoney]

I can look tonight... I can't access at work. I spend ~4hrs a day in excel and all of my personal docds are on google docs

 

[stoney]

google docs are definately the minimal version of excel... it covers the majority of users, but only has a tiny percentage of the functionality.

 

[pnj]

I only put it on G.docs so people could see what I'm doing....

it's pretty simple stuff, but I'm a big dummy.

 

[pnj]

Here is the first question.

J&M Manufacturing plans on purchasing a new assembly machine for $30,000 to automate one of its current manufacturing operations.It will cost an additional $2,500 to have a new machine installed. With the new machine, J&M expects to save $12,000 in annual operating and maintenance costs. The machine will last five years, with an expected salvage value of $5,000.00

1. a) How long will it take to recover the investment (plus installation cost)?

Given:
Total cost of machine including installation = $32,500.00
Savings per year, $12,000.00
Value of machine in five years $5,000.00

 

[rockofullr]

Are you familiar with the Net Present Value and Future Value function?

Pretty sure that's what they want you to do.

 

[binary visions]

This isn't a matter of knowing excel. It's a matter of knowing financial equations.

They all look like very straightforward financial calculations, your book will probably have sample problems with these exact scenarios but different values. The first problem is a just a payback calculation - there are equations and automatic calculators everywhere for that.

I couldn't possibly begin to remember the equations from my stupid business finance class but I definitely remember problems in the book exactly like that with solutions.

 

[pnj]

not enough to know how to use it. I have not used this program very much.

 

[pnj]

do not know financial equations.

 

[binary visions]

do not know financial equations.

I think I mis-read your initial post. You mean you're taking a class where you are not learning the subject matter through lecture/notes, have not purchased the book, and would still like to complete the assignments?

 

[Mr Jones]

Do you really have to use excel to do figure this out? I'm no math wiz, but this makes sense in my head. Albiet, alot of relivant info is missing to make this even remotely "real world"


12,000 savings per year = 1,000 saved per month
32,500 spent / 1,000 saved per month = 32.5 months for break even based on savings

At 60months:
60 months x 1,000 saved per month = 60,000 saved
salvage value = 5,000
saved + salvage value = 65,000
saved + salvage val - inital cost = 32,500

 

[CBJ]

Its a while ago since business school but what about finance cost/discount cost.

 

[pnj]

I did buy the book. I said it cost $100.00 bucks.

The lectures are about finances but not about what the homework is on. The prof. is in some other world..

The book does talk about Future Worth, Present Worth, etc but the examples are either so simple or so advanced, that no one in the class can figure out how to do the actual homework.

So...

The machine costs $32,500.00 after it's installed.

the company saves $12,000.00 each year.

the machine is worth $5,000.00 after five years.

12,000.00 times five years = $60,000.00

so in around 2.5 years, they will have made their money back?

 

[stoney]

buy an HP12. Read the manual.

 

[jonKranked]

A college student buys a text book for $100. The class is 15 weeks long. If he has not used the book in the first 6 weeks, how much pot will he need to smoke to make it through the remaining 9 weeks?

 

[CBJ]

As rockofullr mentioned net present value is what you are looking for. Google its not that difficult but at least in business school you above answer would not be correct. I am not sure what level you are at?

 

[pnj]

I don't smoke pot.

 

[crashwins]

That's not a NPV question...the first one that is

 

[schweino1]

calculate the balance (equilibrium) point... its quite easy.. graph it if you like...

just add a series in a timeline chart with a flat 32,500.. then, on a monthly basis start graphing the cumulative savings, for the salvage value, you have that money from the begining, so your initial datum is the 1000 dlls savings of the first month + the 5k of the salvage value.. start adding 1k a month and see where the lines cross each other...

 

[jonKranked]

I don't smoke pot.

there's your problem

 

[stoney]

calculate the balance (equilibrium) point... its quite easy.. graph it if you like...

just add a series in a timeline chart with a flat 32,500.. then, on a monthly basis start graphing the cumulative savings, for the salvage value, you have that money from the begining, so your initial datum is the 1000 dlls savings of the first month + the 5k of the salvage value.. start adding 1k a month and see where the lines cross each other...

Or... you could just use a financial calculator to find the answer.

 

[stoney]

what is the interest rate? you need that to sold the equation...

 

[pnj]

Doesn't list the interest rate....

 

[rockofullr]

I messed around with your spreadsheet (I wasn't the one drawing penises).

The answers may or may not be correct but it may help you get started.

 

[stevew]

fvck this class.

 

[dante]

what is the interest rate? you need that to sold the equation...

Doesn't list the interest rate....

Today's interest rates = zero, haven't you been reading the newspapers?

 

[kazlx]

What class is that for? It's definitely a finance class question. If they don't give interest, there isn't any. That just means they are paying cash for the equipment and not borrowing the money. After looking at it, it could be a simple equation if you are just supposed to use the info they give you.

12K saved per year + it's worth $5K after 5 years. You paid 30K for it, so it depreciates at 5K/year or think of it as it's work 12000 each year you own it (x) plus it's salvage value of [constant 5K + (30k - (5k times the number of years you own it - x). When does all that equal 32.5k?

12K(x) + [5K + (30K-5K(x))]= $32.5K





12K year times years saved plus machine value depreciated at 5k a year plus it's constant salvage value. When does that equal your investment of $32,500.

Solve for x.


Sometimes problems are a PITA when you don't know what they are asking for, because there are a few different ways you could interpret that question and multiple ways to solve it.

 

[MTB_Rob_NC]

I was a little confused by Vanilla Ice's picture on the spreadsheet. I would say the answer is C

 

[stoney]

There will be interest, because to calculate PV and/or FV you need a risk-free rate.