Answer:
Annual equivalent cost of the investment = $30,603.43 per annum
Explanation:
<em>Equivalent Annual cost is the Present Value of the total cost over the investment period divided by the appropriate annuity factor.</em>
<em>Step 1 </em>
<em>PV of cash flows</em>
PV of first cost = 150,000
<em>PV of annual maintenance cost of $17,500</em>
= 17,500× (1-(1+0.08)^(-30))/0.08
= 197,011.21
<em>PV of salvage value</em>
$25,000 × (1+0.08)^(-30)
= 2,484.43
<em>PV of net total cost </em>
= 197,011.21 +150,000 - 2,484.43
= 344,526.78
Step 2
<em>Determine the annuity factor for 30 years at 8%</em>
(1-(1+0.08)^(-30))/0.08
=11.2577
Step 3
<em>Equivalent annual cost</em>
= 344,526.78 / 11.2577
<em> =$30,603.43</em>
Annual equivalent cost of the investment = $30,603.43 per annum
Answer:
Purchase Decision Process
Explanation:
The purchase decision process is the one through which the a buyer makes his decision of buying a certain product.
This consumer buying process has five step which they use to make their decision, are following;
- Need or Problem Recognition.
- Information Search.
- Evaluation of Alternatives.
- Purchase Decision.
- Post-Purchase Evaluation.
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Answer:
b. Job order production.
Explanation:
Job order production is the process of manufacturing non-standard or unique products for specific customers. Sometimes making a job order production is also called making a work order or making it an individual order, because each order or work is an order placed by the customer. In most cases, custom jobs are created only once. Many manufacturers specialize in mass production of custom products. Buyers come to the manufacturer with a special design or product, and the manufacturer develops and creates an individual product.
A customer-oriented production puts customer satisfaction at the center of each of its business decisions. Customer focus is defined as an approach to sales and customer relations, in which employees focus on helping customers meet their long-term needs and desires. Here, management and employees coordinate their individual and team goals in order to satisfy and retain customers. This contrasts, in particular, with a focus on sales, which is a strategic approach when the needs and desires of a company or seller are evaluated in relation to the client.
Just in Time production is an inventory strategy developed to increase production and productivity. All production processes (in-progress cost) and the type of production taking into consideration the time criteria in order to minimize the associated sub-costs are derived from the Japanese Kanban system. During production, it determines the order of work by considering the production of the next process. This strategy, which states that the order level is reached in the storage process and that the order must be met after this point, provides the most efficient storage volume and production continuity. In short, just in time, the demand is to produce as soon as possible with excellent quality and transport it to the right place at any time.
Job lot production is a production futures contract whose trading volume is below the level required by normal operations. These contracts or lots are available to add liquidity to futures exchanges by allowing smaller "participants" to enter the market.
Process production is a system from production in which a product goes through several processes or stages from production, which will be operated on a more continuous basis; for example, in oil refineries and petrochemical plants, where these processes include liquid or semi-solid materials. In the production of the main product, they say, gasoline, from such in the production process, by-products such as tar or creosote can inevitably arise.
They will require him to submit a business plan and a financial plan. The correct option among all the options that are given in the question is option "d" or the last option. The financial plan needs to be perfect for the loan to be passed and also for the business to be successful. The local bank needs to understand the way the company will make profit and pay back the loan.
