1. (20 points) (Solve by hand no use of Excel) A fully automated conveyor system is...

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1. (20 points) (Solve by hand no use of Excel) A fully automated conveyor system is installed at Amazon distribution system that will have an initial investment of $1,750,000, and will require an upgrade of 25% of initial investment in software at the end of years 4 and 8. The company expects that the system will generate equivalent annual savings $350,000 and annual O&M costs of $85,000 increasing by 7,500 every year thereafter. The company expects that the robot will have a useful life of 12 years, and that time will have a salvage value of $100,000. The administration is concerned about the accuracy of the projected savings and the investment required by the upgrade at the end of years 4 and 8. Perform a two parameter BTCF sensitivity analysis to determine the range in which these two parameters could vary to have a PW>0. 1. (20 points) (Solve by hand no use of Excel) A fully automated conveyor system is installed at Amazon distribution system that will have an initial investment of $1,750,000, and will require an upgrade of 25% of initial investment in software at the end of years 4 and 8. The company expects that the system will generate equivalent annual savings $350,000 and annual O&M costs of $85,000 increasing by 7,500 every year thereafter. The company expects that the robot will have a useful life of 12 years, and that time will have a salvage value of $100,000. The administration is concerned about the accuracy of the projected savings and the investment required by the upgrade at the end of years 4 and 8. Perform a two parameter BTCF sensitivity analysis to determine the range in which these two parameters could vary to have a PW>0.

Answer rating: 100% (QA)

ANS WER The two parameters that could vary to have a PW 0 are the annual savings and the investment ... View the full answer