A manufacturing company recently considered replacing one of its forming machines with a newer, faster, more accurate model. What cash flows would this decisions be likely to affect? List both cash flows that would be easy to quantify and those for which measurement would be difficult.
The manufacturing Company which is considering the proposal of purchase of new machine , has to consider the following factors:
Cash Out flows resulting out of the proposal.
1.Purchase price of new machine.
2.Installation charges for the erection of the new machine.
3.Transport fees to bring the new machine to the site.
4.Architect fees/engineering fees to be paid for the installation of new machine.
5.estimated maintenance expenses to be incurred over the life span of the machine.
6.Training expenses to be incurred for training the existing personnel to run the new ...
The answer contains what are elements of cash inflows and cash outflows will affect the purchase of new machine in detail.