- By installing some elaborate inspection equipment on its
assembly line, the Robot Corp. can avoid hiring an extra worker who
would have earned $36,000 a year in wages and an additional $9500 a
year in 13 employee benefits. The inspection equipment has a 6-year
useful life and no salvage value. Use a nominal 18% interest rate
in your calculations. How much can Robot afford to pay for the
equipment if the wages and worker benefits were to have been
paid.
(a) At
the end of each year
(b) Monthly
Explain why the answer in (b) is
larger.