A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft couplings that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $40,000 salvage value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $124,000 per year. The company's MARR is 37% per year, and it uses a 3-year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. The incremental ROR is %. The manager should select robot: (Click to select) v (Click to select) Y

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A process control manager is considering two robots to improve materials-handling capacity
in the production of rigid shaft couplings that make dissimilar drive components. Robot X has
a first cost of $92,000, an annual M&O cost of $31,000, and $40,000 salvage value, and it
will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual
M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $124,000
per year. The company's MARR is 37% per year, and it uses a 3-year study period for
economic evaluations. Calculate the incremental ROR, and identify the robot the manager
should select.
The incremental ROR is
%.
The manager should select robot: (Click to select)
(Click to select)
Y
Transcribed Image Text:A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft couplings that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $40,000 salvage value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $124,000 per year. The company's MARR is 37% per year, and it uses a 3-year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. The incremental ROR is %. The manager should select robot: (Click to select) (Click to select) Y
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