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Business, 04.03.2021 22:20 kainagoicoowntpi

Eddie is a production engineer for a major supplier of component parts for cars. He has determined that a robot can be installed at the production line to replace one employee. The employee earns $20 per hour and benefits worth $8 per hour for a total annual cost of $58,240 this year. Eddie estimates that this cost will increase 6% each year. The robot will cost $16,500 to operate for the first year with costs increasing by $1,500 each year. The firm uses an interest rate of 15% and a 10-year planning horizon. The robot costs $75,000 installed and will have a salvage value of $5,000 after 10 years. Should Eddie recommend that purchase of the robot

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