round #2A, 3A and 4B to nearest whole dollar amount

11 10 points eBook Print References Saxon Products, Incorporated, is investigating the purchase of a robot for use on its 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 costs. Salvage value in 5 years Useful life $1,850,000 $435,000 $ 228,000 $ 48,000. $77,000 5 years Using the robot will save 29,000 direct labor-hours each year. The labor rate is $15 per hour. Also, the automated work flow will reduce inventories by $418,000. 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 17% required rate of return. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(s) using tables. Required: 1. Determine the annual net cost savings if the robot is purchased. (Do not include the $418,000 inventory reduction or the salvage value in this computation.) 2-a. Compute the net present value of the proposed investment in the robot. 2-b. Should the robot be purchased? 3-a. Assume the robot is purchased. However, due to unforeseen problems, software and installation costs were $93,000 more than i estimated and direct labor could only be reduced by 22,000 hours per year, rather than the original estimate of 29,000 hours. Assuming all other cost data are accurate, what would a postaudit suggest is the actual net present value of this investment? 3-b. Did the company make a wise investment? 4-a. Which of the following are intangible benefits associated with the new automated equipment? 4-b. Based on your analysis in Requirement 3 above, compute the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 17% rate of return.