Peregrine.xlsx - PEREGRINE The CNC Machine Decision 1 a...

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PEREGRINE: The CNC Machine Decision 1. 3. a. Purchase a new CNC machin with cash - Weaknesses : Not to have the cash readily available - Strengths : If there is a breakdown, work will continue b. Finance the purchase of a new CNC machine - Weaknesses: The purchase cost of the machine is lower than in option 1. - Strenghts : If there is a breakdown, work will continue. Also, it had the necessary cash on hand, sufficient space and right employees in place to execute the plan. c. Add a third shift - Weaknesses : major safety and supervision challenges - Strenghts : it could be done at a low cost. The best option regarding the Net Present Value is to add a third shift, but the payback period of this project is much longer than the other options. For that, to finance the purchase of a new CNC machine is the best option because it has the largest Net Present Value amount between Option 1 and 2, and also, the shorest period for the Payback: not even 4 days.
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OPTION 1. PURCHASE A NEW CNC MACHINE WITH CASH Cash inflows 6,640,000 Computation
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Christopher Reinemann
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