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An Investment Analysis of Flat Bed Dryer

Autor:   •  October 3, 2016  •  Lab Report  •  710 Words (3 Pages)  •  960 Views

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Celine Joy A. Dela Peña                                                                        Sept. 20, 2016

2011-45376                                                                                Sept. 27, 2016

Exercise no. 6

An Investment Analysis of Flat Bed Dryer

Sample computations:                                                    

  • Electricity: P15.00 x 3 kW x 16 hours x 90 days                  = 64,800
  • Kerosene: P40.00 x 2 Li x 16 hours x 90 days                       = 115,200
  • Rent: P100 x 100 square meters                                         = 10,000
  • Labor: 2 laborers x P500.00 x 90 days                                =  90,000
  • Repair & maintenance: P180,000.00 x 2%                        =  3,600
  • Interest: P180,000.00 x 8%                                                   = 14,400

Total Variable Cost                                        = P 298,000.00

        

Total weight of grains per year:

[pic 1]

  1. Find the cost of drying per kg of wet grains using 20% mark-up.

Cost of drying/kg grain [pic 2]P 0.8778

Benefits = BEP X 1.2 = P 1.0534 x 360,000 kg = P 379,224.00 /year

  1. Make an investment analysis using NPV and BCR. Is it worth investing in a dryer? Justify your answer.

Total Discounted Benefits                =         2,308,347.59

Less (Total Discounted Cost)       _                = _        1,941,484.00

NPV (Net Present Value)                  =         366,863.59

Benefit-Cost Ratio [pic 3]

        Yes, it is worth investing because the NPV has a positive value, while the BCR has a value greater than 1, which means that the benefits out weighted the costs.

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