An industrial engineer at Robots manufacturing company is considering replacing robot X by robot Y...
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An industrial engineer at Robots manufacturing company is considering replacing robot X by robot Y to reduce costs in a production line. Robot X has a market value of $82,000 now, an annual maintenance and operation (M&O) cost of $33,000, and salvage values of $50,000, $42,000, and $35,000 after 1, 2, and 3 years from now, respectively. Robot Y will have a first cost of $97,000, an annual M&O cost of $25,000, and salvage values of $60,000, $51,000, and $42,000 after 1, 2, and 3 years, respectively. Which robot should be selected if a 2-year study period is specified at an interest rate of 15% per year! Robot X with AWX = $ - 63,905 Robot Y with AWY = $ - 60,946 Do not replace robot X by robot Y Robot Y with AWY = $ + 60,946 Robot X with AWX = $ + 63,905
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