Cedile Trailer Supply Has Received Three Proposals for Its New

question 133

Essay

Cedile Trailer Supply has received three proposals for its new trailer assembly line.Information on each proposal is as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { Proposal X } & \text { Proposal Y } & \text { Proposal Z } \\\hline \text { Initial investment in equipment } & \$ 180,000 & \$ 140,000 & \$ 145,000 \\\hline \text { Working capital needed } & 0 & 0 & 15,000 \\\hline \text { Annual cash saved by operations: } & & & \\\hline \text { Year 1 } & 60,000 & 60,000 & 60,000 \\\hline \text { Year 2 } & 60,000 & 50,000 & 60,000 \\\hline \text { Year 3 } & 60,000 & 35,000 & 60,000 \\\hline \text { Year 4 } & 60,000 & 10,000 & 60,000 \\\hline \text { Salvage value end of year: } & & & \\\hline \text { Year 1 } & 30,000 & 25,000 & 45,000 \\\hline \text { Year 2 } & 25,000 & 20,000 & 40,000 \\\hline \text { Year 3 } & 20,000 & 15,000 & 35,000 \\\hline \text { Year 4 } & 15,000 & 10,000 & 25,000 \\\hline \text { Working capital returned: } & 0 & 0 & 15,000 \\\hline\end{array}$$ Required:
Determine each proposal's payback.

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Definitions:

Building

The act or process of constructing structures such as houses, offices, and factories.

Service Businesses

Service businesses are companies that primarily earn revenue through providing intangible products and services rather than selling physical goods. Examples include consulting firms, restaurants, and cleaning services.

Plumbers

Tradespeople specializing in installing, maintaining, and repairing systems used for water, sewage, and drainage in plumbing systems.

Landscapers

Professionals who design, maintain, and modify outdoor spaces, gardens, and yards to enhance aesthetic appeal and functionality.