An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is...
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An automobilemanufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labor. The initial cost of the robot is $ and the annual labor savings are projected to be$ If purchased, the robot will be depreciated under MACRS as a fiveyear recovery property. The robot will be used for seven years, at the end of which time, the firm expects to sell it for $ The companys marginal tax rate is over the project period. Perform the following:a Determine the net aftertax cash flows for each period over the project life.b Annual equivalent cash flow company MARR C Net present worth assuming company MARRD IRR of the project.
An automobilemanufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labor. The initial cost of the robot is $ and the annual labor savings are projected to be$ If purchased, the robot will be depreciated under MACRS as a fiveyear recovery property. The robot will be used for seven years, at the end of which time, the firm expects to sell it for $ The companys marginal tax rate is over the project period. Perform the following:a Determine the net aftertax cash flows for each period over the project life.b Annual equivalent cash flow company MARR C Net present worth assuming company MARRD IRR of the project.
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