FONDERIA DI TORINO Syndicate 2
MM 5007
FINANCIAL MANAGEMENT
FONDERIA DI TORINO
YP 52 A – Syndicate 2
Lupita Thanaya Putri – 29114322
Andika Fadhli – 29114358
Grace Alonia Sitepu – 29114403
Wildan Rachman – 29114416
Gwendy Dale Henry – 29114954
MASTER OF BUSINESS ADMINISTRATION
SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
2015
FONDERIA DI TORINO
Case Background
Fonderia di Torino specialized in tlie production of precision metal castings for use in automotive. aerospace. and constluction equipment. In November 2000, Francesca Cerini, managing director of Fonderia di Torino was considering to purchase Vulcan Mold-maker automated molding machine. This machine would prepare the sand molds into which molten iron was poured to obtain iron castings. The Vulcan Mold-Maker would replace an older machine and would offer improvements in quality and some additional capacity for expansion. Similar molding-machine proposals had been rejected by the board of directors for economic reasons on three previous occasions, most recently in 1999. This time, given the size of the proposed expenditure of about (euros) €1 million, Cerini was seeking a careful estimate of the projects costs and benefits and ultimately a recommendation of whether to proceed with the investment.
Table 1. information from the case
Old Machine
Price of old machine
€ 415.807
Cumulative Depreciation
€ 130.682
Annual Depreciation
€ 47.250
Year usage
2 3/4
Book value
€ 285.125
Sales of old machine
€ 130.000
Year operating left
6
Old Machine - Operating
Woker
€ 7,33
Maintenance workers
€ 7,85
Woker num
24
Maintenance worker num
3
Working hour per shift
8
Total Working Day / Year
210
Total labor cost
€ 335.109,60
Maintenance supplies
€ 4.000
Electrical Power
€ 12.300
New Machine
Price + Installation Cost
€ 1.010.000
Usage year
8
New Machine - Operating
Worker
€ 11,36
Number of Worker
2
FINANCIAL MANAGEMENT
FONDERIA DI TORINO
YP 52 A – Syndicate 2
Lupita Thanaya Putri – 29114322
Andika Fadhli – 29114358
Grace Alonia Sitepu – 29114403
Wildan Rachman – 29114416
Gwendy Dale Henry – 29114954
MASTER OF BUSINESS ADMINISTRATION
SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
2015
FONDERIA DI TORINO
Case Background
Fonderia di Torino specialized in tlie production of precision metal castings for use in automotive. aerospace. and constluction equipment. In November 2000, Francesca Cerini, managing director of Fonderia di Torino was considering to purchase Vulcan Mold-maker automated molding machine. This machine would prepare the sand molds into which molten iron was poured to obtain iron castings. The Vulcan Mold-Maker would replace an older machine and would offer improvements in quality and some additional capacity for expansion. Similar molding-machine proposals had been rejected by the board of directors for economic reasons on three previous occasions, most recently in 1999. This time, given the size of the proposed expenditure of about (euros) €1 million, Cerini was seeking a careful estimate of the projects costs and benefits and ultimately a recommendation of whether to proceed with the investment.
Table 1. information from the case
Old Machine
Price of old machine
€ 415.807
Cumulative Depreciation
€ 130.682
Annual Depreciation
€ 47.250
Year usage
2 3/4
Book value
€ 285.125
Sales of old machine
€ 130.000
Year operating left
6
Old Machine - Operating
Woker
€ 7,33
Maintenance workers
€ 7,85
Woker num
24
Maintenance worker num
3
Working hour per shift
8
Total Working Day / Year
210
Total labor cost
€ 335.109,60
Maintenance supplies
€ 4.000
Electrical Power
€ 12.300
New Machine
Price + Installation Cost
€ 1.010.000
Usage year
8
New Machine - Operating
Worker
€ 11,36
Number of Worker
2