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  • Ball Sports Inc Is Considering An Investment in One of

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    Ball Sports Inc is considering investing in either a stitching machine or a golf ball machine. The stitching machine would increase baseball production by 60 per hour and has a contribution margin of $0.30 per baseball. It would cost $484,600 and operate 7,500 hours per year. The golf ball machine would reduce labor costs by $40 per hour. It would cost $897,400 and operate 6,000 hours per year. Ball Sports seeks a minimum 15% return and needs to determine the net present value and present value index of each to decide which to invest in.

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    Ball Sports Inc is considering investing in either a stitching machine or a golf ball machine. The stitching machine would increase baseball production by 60 per hour and has a contribution margin of $0.30 per baseball. It would cost $484,600 and operate 7,500 hours per year. The golf ball machine would reduce labor costs by $40 per hour. It would cost $897,400 and operate 6,000 hours per year. Ball Sports seeks a minimum 15% return and needs to determine the net present value and present value index of each to decide which to invest in.

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    © All Rights Reserved
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    12 views1 page

    Ball Sports Inc Is Considering An Investment in One of

    Uploaded by

    trilocksp Singh
    Ball Sports Inc is considering investing in either a stitching machine or a golf ball machine. The stitching machine would increase baseball production by 60 per hour and has a contribution margin of $0.30 per baseball. It would cost $484,600 and operate 7,500 hours per year. The golf ball machine would reduce labor costs by $40 per hour. It would cost $897,400 and operate 6,000 hours per year. Ball Sports seeks a minimum 15% return and needs to determine the net present value and present value index of each to decide which to invest in.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Ball Sports Inc is considering an investment in one of

    Ball Sports Inc. is considering an investment in one of two machines. The stitching machine will
    increase productivity from sewing 300 baseballs per hour to stitching 360 per hour. The
    contribution margin is $0.30 per baseball. Assume that any increased production of baseballs
    can be sold. The second machine applies a synthetic balata cover to golf balls. The golf ball
    machine will reduce labor cost. The labor cost saved is equivalent to $40 per hour. The stitching
    machine will cost $484,600, have an eight-year life, and will operate for 7,500 hours per year.
    The golf ball machine will cost $897,400, have an eight-year life, and will operate for 6,000
    hours per year. Ball Sports Inc. seeks a minimum rate of return of 15% on its investments.a.
    Determine the net present value for the two machines. Use the table of present values of an
    annuity of $1 in the chapter. Round to the nearest dollar.b. Determine the present value index
    for the two machines. Round to two decimal places.c. If Ball Sports Inc. has sufficient funds for
    only one of the machines and qualitative factors are equal between the two machines, in which
    machine should it invest?View Solution:
    Ball Sports Inc is considering an investment in one of
    SOLUTION-- http://solutiondone.online/downloads/ball-sports-inc-is-considering-an-investment-
    in-one-of/

    Unlock answers here solutiondone.online


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