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Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. Develop a cost equation for the total machine maintenance cost.
Scenario Analysis
A method of evaluating potential future scenarios by contemplating various possible results, often used for strategic planning purposes.
Simulation Analysis
A statistical method that involves running multiple scenarios of a model in order to estimate the probability of different outcomes.
Sensitivity Analysis
A financial modeling tool used to evaluate how different values of an independent variable affect a particular dependent variable under a given set of assumptions.
NPV
Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.
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