AMD Construction and Negotiation
Read Case 3: AMD Construction in the text (pg. 448-450) and answer the following questions in a four 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 |
