Andy StefanikBen OlsonNicole SporrerHongyang Shao
Fonderia di Torino S. g. A.
Fonderia di Torino was founded inside the 1920's and focuses on making precision metal castings pertaining to OEM parts for many from the major car manufacturers. They can be known for their excellent quality parts. They may be especially reputed for making safety parts (parts that if it fails the operator seems to lose control). Fonderia di Torino has just recently considered purchasing the Vulcan Mold Machine. This mold maker will replace 6 semi automatic stamping equipment and enhance efficiency, reduce costs and produce higher quality items. During each of our analysis of the scenario all of us made a few assumptions. All of us assumed the fact that sales would not change from one alternative to the other and also presumed that there is not any capital rationing. We as well assumed the risk free charge is 1 ) 71% (looked up value). Finally we all assumed which the return on the market for each of our case was 6. 10% (also a looked up value. With these kinds of numbers we all calculated a WACC of 5. 93% which we intend to use since Fonderia pada Torino's new hurdle charge. When selecting whether or not we need to accept the project intended for the Vulcan Mold Equipment we had to determine what benefits we would be getting from this decision. We concluded that by accepting this new job we would reduce our expenditures by 380, 560 each year. We would likewise take up half as much space because the old equipment did. The modern machine is usually more efficient and would be able to maximize capacity simply by 30%. The modern machine would also increase the quality of all the casts that it makes. Another gain is the fact that the new machine will decrease medical statements because of fewer back problems for the employees due to the fact that we have less employees. Following taking most of these into account all of us calculated a NPV with this project of €1, 741, 828, 029 compared to the NPV of the current machines of €1, 376, 910, 813. The difference in the two NPV's is €364, 917, 216 in favor of the new...