A former French Fry King USA CEO, Peter French, said that purchasing a $34,000 robotic arm...

 

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A former French Fry King USA CEO, Peter French, said that purchasing a $34,000 robotic arm would be cheaper than paying fast-food workers $11 per hour for food preparation tasks like bagging french fries. To test the former CEO's assertion using a hypothetical example, make the following assumptions: a. For the cost of the hourly workers, use a total wage rate of $13 per hour to reflect payroll taxes (the hourly wage rate used here is higher than $11 since payroll taxes can add 15% or more to the hourly wage rate). b. Assume that freight and installation for the robot's initial placement in a French Fry King restaurant will be a one-time cost of $4,600. c. The robot will require annual maintenance service. Assume an annual service contract is required that costs 15% of the original robot cost including the original freight/installation. d. Assume that the robot will replace 14 employee hours per day, 360 days per year (the robot will not, at least initially, be as versatile as a person and cannot fully eliminate all food prep workers at this point). Electricity and supplies consumed by the robot will be assumed to be $1,400 per year. 1. What would the payback period be on a French Fry King robot used for food preparation? (Round to the nearest two decimal places.) 2. What qualitative factors would French Fry King need to consider when deciding whether to purchase robots to replace some of its food preparation workers? 3. Given the payback period, would net present value (NPV) or internal rate of return (IRR) be likely to be useful tools for analyzing this decision? Support your response. A variety of robots have been featured at the National Restaurant Show that can be used for a variety of tasks in restaurants. These robots were introduced at the same time that an ongoing debate ensued in the United States about the merits of a national minimum wage of $11 per hour for every worker. (Click the icon to view additional information.) Read the requirements. Requirement 1. What would the payback period be on a French Fry King robot used for food preparation? (Round your answer to two decimal places.) Payback period years A former French Fry King USA CEO, Peter French, said that purchasing a $34,000 robotic arm would be cheaper than paying fast-food workers $11 per hour for food preparation tasks like bagging french fries. To test the former CEO's assertion using a hypothetical example, make the following assumptions: a. For the cost of the hourly workers, use a total wage rate of $13 per hour to reflect payroll taxes (the hourly wage rate used here is higher than $11 since payroll taxes can add 15% or more to the hourly wage rate). b. Assume that freight and installation for the robot's initial placement in a French Fry King restaurant will be a one-time cost of $4,600. c. The robot will require annual maintenance service. Assume an annual service contract is required that costs 15% of the original robot cost including the original freight/installation. d. Assume that the robot will replace 14 employee hours per day, 360 days per year (the robot will not, at least initially, be as versatile as a person and cannot fully eliminate all food prep workers at this point). Electricity and supplies consumed by the robot will be assumed to be $1,400 per year. 1. What would the payback period be on a French Fry King robot used for food preparation? (Round to the nearest two decimal places.) 2. What qualitative factors would French Fry King need to consider when deciding whether to purchase robots to replace some of its food preparation workers? 3. Given the payback period, would net present value (NPV) or internal rate of return (IRR) be likely to be useful tools for analyzing this decision? Support your response. A variety of robots have been featured at the National Restaurant Show that can be used for a variety of tasks in restaurants. These robots were introduced at the same time that an ongoing debate ensued in the United States about the merits of a national minimum wage of $11 per hour for every worker. (Click the icon to view additional information.) Read the requirements. Requirement 1. What would the payback period be on a French Fry King robot used for food preparation? (Round your answer to two decimal places.) Payback period years

Answer rating: 100% (QA)

ANSWER 1 Cash outflow for purchasing a robot 34000 fright intallationcost total case outflow 46... View the full answer