Betty’s original Make Analysis
Internal Time & Effort – $500,000
Travel and Related Cost in Assessing Cranes and Make Recommendation – $150,000
Initial Training for 2 Crane Operators – $20,000
Pre-Transaction TOTAL – $670,000
Purchase Cost – $11,000,000
Discounted Factor – 0.95
Discounted Value – $550,000
Discounted Rate – 5%
$11,000,000 – $550,000 = $10,450,000
Transaction TOTAL – $10,450,000
Annual Operating Cost (excluding operators) – $100,000 in 10 years
Maintenance Cost – $500,000 in 10 years
Wages and Benefits – $500,000 in 10 years
Major Overhaul – $400,000 in 5 years
