week 5

AMD Construction

Read the AMD Construction case study and answer the following questions in a 2-4 page, APA formatted paper.

Discuss the various steps in the capital equipment acquisition process.

Develop a comprehensive analysis of the negotiations between Jane Axle and Tom Reed. (Provide a chart to show financial impacts.)

What is your assessment of the negotiations process, given what you have studied? What are your recommendations for Mr. Reed?

You must justify your conclusions.

~Suggestion of format for analysis:

Current Machine

CAT-1 machine-purchase

CAT-1 machine – Lease

Operating cost (without operators)

Direct Labor

Depreciation (straight line) 4 months

Lease Expense 4 Months

Interest expense at 8% for 4 months

Salvage Value after 3 years

Unexpected Costs

Totals