A young industrial engineer analyzed some equip- ment to replace one production worker. The present worth of employing one less production worker just equaled the present worth of the equipment costs, assuming a 10-year useful life for the equipment. It was decided not to buy the equipment. 0022 A short time later, the production workers won a new 3-year union contract that granted them an immediate 40¢-per-hour wage increase, plus an addi- tional 25¢-per-hour wage increase in years 2 and 3. Assume that in future years, a 25¢-per-hour wage increase will be granted. 129 (a) By how much does the present worth of replac- ing one production employee increase? Assume an interest rate of 8%, a single 8-hour shift, and 250 days per year. (b) What are the ethical issues of replacing workers with advanced technologies from the firm's, the workers', and society's perspective?

A young industrial engineer analyzed some equip- ment to replace one production worker. The present worth of employing one less production worker just equaled the present worth of the equipment costs, assuming a 10-year useful life for the equipment. It was decided not to buy the equipment. 0022 A short time later, the production workers won a new 3-year union contract that granted them an immediate 40¢-per-hour wage increase, plus an addi- tional 25¢-per-hour wage increase in years 2 and 3. Assume that in future years, a 25¢-per-hour wage increase will be granted. 129 (a) By how much does the present worth of replac- ing one production employee increase? Assume an interest rate of 8%, a single 8-hour shift, and 250 days per year. (b) What are the ethical issues of replacing workers with advanced technologies from the firm's, the workers', and society's perspective?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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