Question 2 (6 points) Two industrial robot options are currently proposed to be purchased for the...

 

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Question 2 (6 points) Two industrial robot options are currently proposed to be purchased for the assembly company. The followings are the information about two options. Robot 1: The initial cost is $220K. The savings are expected to be $85K in the first year and increase by 3% from year 2 until the end of its life. The salvage value is expected to be $96K and life cycle is expected to be 6 years. Robot 2: The initial cost is $200K. The savings are expected to be $100K in the first year and increase $5K from year 2 until the end of its life. There will be service tune-up fee, $50K, at year 2. The salvage value is expected to be $90K and life cycle is expected to be 6 years. Which robot should the company purchase if MARR is 10%? Question 2 (6 points) Two industrial robot options are currently proposed to be purchased for the assembly company. The followings are the information about two options. Robot 1: The initial cost is $220K. The savings are expected to be $85K in the first year and increase by 3% from year 2 until the end of its life. The salvage value is expected to be $96K and life cycle is expected to be 6 years. Robot 2: The initial cost is $200K. The savings are expected to be $100K in the first year and increase $5K from year 2 until the end of its life. There will be service tune-up fee, $50K, at year 2. The salvage value is expected to be $90K and life cycle is expected to be 6 years. Which robot should the company purchase if MARR is 10%?

Answer rating: 100% (QA)

Okay lets calculate the net present value NPV for each robot option using a M... View the full answer