Alex considers using two robots instead of one worker per shift on an assembly line. The robots together cost $135000. They have an expected life of 15 years, although their expected scrap value is zero. This life depends on economic loss and does not depend on wear. The maintenance and operating costs of the robots are expected to be $5000 per year per shift worked. Each person in Nur's company costs $25,000 per shift per year. If the firm's interest rate is 17%, what is the equivalent annual value for the robots? Calculate separately for one shift and three shifts.

Alex considers using two robots instead of one worker per shift on an assembly line. The robots together cost $135000. They have an expected life of 15 years, although their expected scrap value is zero. This life depends on economic loss and does not depend on wear. The maintenance and operating costs of the robots are expected to be $5000 per year per shift worked. Each person in Nur's company costs $25,000 per shift per year. If the firm's interest rate is 17%, what is the equivalent annual value for the robots? Calculate separately for one shift and three shifts.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 13P

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