You are considering automating some part of an existing production process. The necessary equipment costs 80,000 to
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You are considering automating some part of an existing production process. The necessary equipment costs €80,000 to buy and install. The automation will save €22,000 per year (before taxes) by reducing labor and material costs. Assume that the equipment has a five-year life and is depreciated to zero on a straight-line basis over that period. It will actually be worth €20,000 in 5 years. The tax rate is 34 percent, and the discount rate is 10 percent. Should we automate?
Related Book For
Data Modeling and Database Design
ISBN: 978-1285085258
2nd edition
Authors: Narayan S. Umanath, Richard W. Scammel
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