Payroll Inc If the Existing Computer System Is Kept and Used,it Would

question 14

Essay

Payroll Inc.Office Services is considering the purchase of a new computer system to replace the one in operation.Data on the new computer system are as follows: $\begin{array}{lr}\text { Cost } & \$ 12,000 \\\text { Salvage value at the end of five years } & \$ 1,000 \\\text { Useful life, in years } & \$ 4,000 \\\text { Annual operating cost } & \$ 4\end{array}$ If the existing computer system is kept and used,it would require the purchase of additional hardware a year from now costing $2,000.After the use of the system for five years,the salvage value would be $300.Additional information on the existing system is as follows: $\begin{array}{lr}\text { Additional years of use } & 5 \\\text { Annual operating costs } & \$ 9,000 \\\text { Remaining book value } & \$ 12,000 \\\text { Current sal vage value } & \$ 3,000 \\\text { Cost of capital } & 12 \%\end{array}$ The company uses the straight-line method of depreciation.
Required: Should the new system be purchased? Why or why not?

Recognize the concepts and terminologies associated with JIT systems.

Identify methods of employee empowerment within JIT frameworks.

Understand the concept of minimum inventory in JIT systems and its importance.

Calculate and comprehend the significance of manufacturing cycle time in JIT operations.

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Definitions:

Economic Turmoil

A period of financial instability and uncertainty affecting economies at either a local, national, or global level.

Assessment Centers

A process involving a collection of exercises designed to evaluate the abilities and potential of candidates or employees for specific roles.

Recruiting Programs

Initiatives or plans designed to attract and select suitable candidates for job positions within an organization.

Employee Development

The process by which an organization invests in improving the skills, knowledge, and abilities of its workforce.