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Ridgley Custom Metal Products (RCMP)

1) Ridgley Custom Metal Products (RCMP) must purchase a new tube bender. RCMP's MARR is 11%. They are considering two models (see first table in attached file).

a) Using the present worth method, which tube bender should they buy?

b) RCMP has discovered a third alternative, which has been added to the table (see second table in attached file). Now which tube bender should they buy?

2) RCMP (pertaining to the first problem in part b) can forecast demand for its products for only three years in advance. The salvage value after three years is $40000 for model T and $80000 for model A. Using the study period method, which of the three alternatives is best?

If you use Excel, please put all results into the Word file (including intermediate calculations); but include both files as well. Thanks!

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Solution Summary

Ridgley Custom Metal Products (RCMP) is assessed.