Problem 13-30 Net Present Value Analysis; Uncertain Future Cash Flows; Postaudit [LO13-2, LO13-41 Saxon Products, Inc., is investigating the purchase of a robot for use on the company's assembly line. Selected data relating to the robot are provided below: Cost of the robot Installation and software Annual savings in inventory carrying costs Annual increase in power and maintenance costs37,000 Salvage value in 5 years Useful life $1,950,000 $ 485,000 $ 217,000 $ 77,000 5 years Engineering studies suggest that use of the robot will result in a savings of 32,000 direct labor-hours each year. The labor rate is $14 per hour. Also, the smoother work flow made possible by the use of automation will allow the company to reduce the amount of inventory on hand by $407,000. This inventory reduction will take place at the end of the first year of operation; the released funds will be available for use elsewhere in the company. Saxon Products has a 15% required rate of return