Investment Appraisal for Miggy and Brothers Co.

Masters
Essay
Miscellaneous
Pages 4 (1004 words)
Download 0
Miggy and Brothers Co (MBC) is a manufacturing firm specializing in the production of customized furniture. In order to increase its production efficiency, the company standardizes some of the components of the furniture. …

Introduction


MBC is considering three alternatives as replacements: model A which will be sourced from the United States; Model B which is a British machine; and model C which will be imported from France. All of these machineries cost $100,000 and are seen to improve the production efficiency of the company and reduce the costs incurred in manufacture. As these are new machines, MBC will be hiring and training personnel who will operate the new equipment. Exact amount is not yet determined but Model C, in particular is expected to incur the highest training cost since the machine is least user-friendly. Models A & B have local dealer which agree to maintain and repair the machines for MBC. In the case of Model C, MBC needs to seek French manufacturers to service the machine in case of emergencies.

The choice between the three machines under consideration can be justified by utilizing tools which tests the profitability of each investment. Three of the most frequently used assessment tools will be employed in MBC decision making. These are payback period, net present value analysis, and internal rate of return analysis.

Aside from the quantitative data given by the management, this report adjusted the figures to enhance the rationale of the choice. In this regard, the salvage value of the old machine to be replaced is reflected as cash flows in Models A, B, and C. ...
Download paper
Not exactly what you need?

Related papers

Evaluation of Investment Appraisal Techniques
(Ross et al., 2002). The latter case is in a situation where only one project is being evaluated. In the event were the company is evaluating a number of projects, for which only one will be selected, the decision criteria is to first of all discard all projects with negative net present values and then select the project with the highest net present value among the positive NPV projects. (Ross et…
Investment Appraisal for Miggy and Brothers Co.
MBC is considering three alternatives as replacements: model A which will be sourced from the United States; Model B which is a British machine; and model C which will be imported from France. All of these machineries cost $100,000 and are seen to improve the production efficiency of the company and reduce the costs incurred in manufacture. As these are new machines, MBC will be hiring and…
The Brothers K
There both direct and indirect connotations to be drawn. For example, many conversations between characters are very often religious directly. However, the book is replete with heavy sarcasm towards religious ideology.…
Capital Investment Appraisal
In applied capital budgeting, however, the fundamental concept of managerial flexibility, or active project management, has been well accepted and long practiced. In the past, one way decision-makers have attempted to supplement a traditional analysis is with "what if" analyses, such as sensitivity analyses, scenario analyses, and simulation. However, richer and more efficient capital budgeting…
Investment appraisal report for introduction of christmas star in the product range of m/s noel plc.
Its product range of seabed survey components are marketed to a wide spectrum of national and multi-national oil service companies based in the UK and the North Sea periphery states.…
INVESTMENT APPRAISAL ASSIGNMENT
Project appraisal techniques and methods vary in their importance and significance therefore their use is also dependent upon what are the intended objectives of the finance managers while assessing and evaluating projects. It is also important to note that the basic method which is now being widely accepted as more credible mean of project appraisals is based on the time value of money concepts.…
Investment Appraisal
Investment Appraisal …