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    Midwestern University Is Considering Replacing Some Xerox Copiers With Faster

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    Amit Pandey
    Midwestern University is considering replacing their aging Xerox copiers with newer Brother copiers due to rising operational costs. Switching to Brother would require retraining two operators and modest remodeling costs. While the upfront cost of the Brother system is higher, it is expected to have lower ongoing costs due to needing fewer operators and less maintenance and supplies. A discounted cash flow analysis over 10 years should determine if switching to Brother would save money despite the higher initial investment. Other factors like copier reliability and functionality could also influence the decision.

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    Midwestern University Is Considering Replacing Some Xerox Copiers With Faster

    Uploaded by

    Amit Pandey
    106 views1 page
    Midwestern University is considering replacing their aging Xerox copiers with newer Brother copiers due to rising operational costs. Switching to Brother would require retraining two operators and modest remodeling costs. While the upfront cost of the Brother system is higher, it is expected to have lower ongoing costs due to needing fewer operators and less maintenance and supplies. A discounted cash flow analysis over 10 years should determine if switching to Brother would save money despite the higher initial investment. Other factors like copier reliability and functionality could also influence the decision.

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    Midwestern University is Considering Replacing Some Xerox Copiers With Faster

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    Midwestern University is considering replacing their aging Xerox copiers with newer Brother copiers due to rising operational costs. Switching to Brother would require retraining two operators and modest remodeling costs. While the upfront cost of the Brother system is higher, it is expected to have lower ongoing costs due to needing fewer operators and less maintenance and supplies. A discounted cash flow analysis over 10 years should determine if switching to Brother would save money despite the higher initial investment. Other factors like copier reliability and functionality could also influence the decision.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    106 views1 page

    Midwestern University Is Considering Replacing Some Xerox Copiers With Faster

    Uploaded by

    Amit Pandey
    Midwestern University is considering replacing their aging Xerox copiers with newer Brother copiers due to rising operational costs. Switching to Brother would require retraining two operators and modest remodeling costs. While the upfront cost of the Brother system is higher, it is expected to have lower ongoing costs due to needing fewer operators and less maintenance and supplies. A discounted cash flow analysis over 10 years should determine if switching to Brother would save money despite the higher initial investment. Other factors like copier reliability and functionality could also influence the decision.

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    © All Rights Reserved
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    of 1

    Solved: Midwestern University is considering replacing

    some Xerox copiers with faster

    Midwestern University is considering replacing some Xerox copiers with faster copiers
    purchased from Brother. The administration is very concerned about the rising costs of
    operations during the last decade.
    To convert to Brother, two operators would have to be retrained. Required training and
    remodeling would cost $3,500. Midwestern’s three Xerox machines were purchased for $8,000
    each, 5 years ago. Their expected life was 15 years. Their resale value now is $1,750 each and
    will be zero in 10 more years. The total cost of the new Brother equipment will be $60,000; it will
    have zero disposal value in 10 years.
    The three Xerox operators are paid $12 an hour each. They usually work a 40-hour week.
    Machine breakdowns occur monthly on each machine, resulting in repair costs of $75 per month
    and overtime of 6 hours, at time-and-one-half, per machine per month, to complete the normal
    monthly workload. Toner, supplies, and so on, cost $50 a month for each Xerox copier.
    The Brother system will require only two regular operators, on a regular work week of 40 hours
    each, to do the same work. Rates are $14 an hour, and no overtime is expected. Toner,
    supplies, and so on, will cost a total of $4,500 annually. Maintenance and repairs are fully
    serviced by Brother for $600 annually. (Assume a 52-week year.)
    1. Using DCF techniques, compute the PV of all relevant cash flows, under both alternatives, for
    the 10-year period discounted at 14%. As a nonprofit university, Midwestern does not pay
    income taxes.
    2. Should Midwestern keep the Xerox copiers or replace them if the decision is based solely on
    the given data?
    3. What other considerations might affect the decision?

    Midwestern University is considering replacing some Xerox copiers with faster

    ANSWER
    https://solvedquest.com/midwestern-university-is-considering-replacing-some-xerox-copiers-
    with-faster/

    Reach out to [email protected] for enquiry.


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