Question: Learning Activity: Is your great idea worth it? Activity: You and your team came up with a plan to automate the very time-consuming process of
Learning Activity: Is your great idea worth it? Activity: You and your team came up with a plan to automate the very time-consuming process of manual welding by using robotic welders. First, compute how this would increase productivity. Year 1 Year 2 Output (sales, in $million) Labor (payroll, in $million) Capital (expenses, in $million) One-time capital investment ($million) SSSS $ 120 $ 160 $ 32 $ 26 $ 45 $ + $ 10 $ Productivity Year 1 Productivity Year 2 Change in Productivity= Next, using just the first year benefits (no amortization/depreciation), what is the ROI for this investment? Change in sales from Year 1 to Year 2 = Change in labor cost from Year 1 to Year 2 = Change in capital cost from Year 1 to Year 2 = Investment required to create this change= ROI = Based on these results, is this project a good idea or not
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