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Nuff Folding Box Company, Inc

question 63

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Nuff Folding Box Company, Inc. is considering purchasing a new glueing machine. The glueing machine costs $50,000 and requires installation costs of $2,500. This outlay would be partially offset by the sale of an existing gluer. The existing gluer originally cost $10,000 and is four years old. It is being depreciated using the Class 10 CCA rate of 30% and can currently be sold for $15,000. The existing gluer has a remaining useful life of five years. If held until year 5, the existing machine's market value would be zero. Over its five-year life, the new machine should reduce operating costs (excluding depreciation) by
$17,000 per year. The new machine will be depreciated using the Class 10 CCA rate of 30%. The firm has a 12 percent cost of
capital and a 40 percent tax on ordinary income and capital gains.
-The payback period for the project is (See Figure 12.7)

Grasp the principles of tapering rates, blanket rates, and commercial zones and their implications.

Understand how tapering rates affect transportation costs and location decisions.

Identify the bases of optimization models in logistics.

Evaluate the implications of various order fulfillment models for logistical management.

Definitions:

Direct Quotation

A direct quotation is a report of the exact words of an author or speaker, often enclosed in quotation marks.

New Friends

The beginning stages of friendship with individuals whom one has recently met or connected with.

Amish

A group of traditionalist Christian church fellowships, known for simple living, plain dress, and reluctance to adopt modern technology.

Contradiction

A situation where two or more statements, ideas, or actions oppose each other, making it impossible for all of them to be true or valid at the same time.