Case 3:

An industrial engineer is considering two robots for purchase by a fiber-optic manufacturing company. Robot X will have a first cost of $90,000, an annual maintenance and operation (M&O) cost of $25,000, and a $60,000 salvage value. Robot Y will have a first cost of $100,000, an annual M&O cost of $30,000, and a $56,000 salvage value. Use a 5-year study period.

1. Fill in the missing information in the table below if available.

2. Draw a cash flow diagram for robot X and robot Y.

3. Which should be selected on the basis of a future worth comparison at an interest rate of 14% per year? Use a 5-year study period?

	Robot X	Robot Y
First cost, $
M&O cost, $
Other costs
Annual income, $ per year
Salvage value, $
Life/Study period, years

(Insert the cash flows, etc.)