Question

An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected...

An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected to be $1,500, with software upgrades increasing by $500 per year from $5,000 in year 1. If the robot has an eight-year life, what is the present value of the costs of owning it? Assume that the robot has no salvage value. Draw the cash flow diagram with your answer.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected...
An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected to be $1,500, with software upgrades increasing by $500 per year from $5,000 in year 1. If the robot has an eight-year life, what is the present value of the costs of owning it? Assume that the robot has no salvage value. Assume the annual interest rate is 10%. Draw a cash flow diagram for the answer and list all of calculation steps and...
5. Machine X costs $10K with annual maintenance costs of $500/year and no salvage value at...
5. Machine X costs $10K with annual maintenance costs of $500/year and no salvage value at end of 4 year useful life. Machine Y costs $20K with no maintenance cost the first year, $100 the 2nd year, increasing by $100 each year. Salvage value of $5K at end of 12 year useful life. Determine the present value (cost) of each system Assume 8% interest
An assembly operation requires $110,000 per year in labor costs. A robot can be purchased an...
An assembly operation requires $110,000 per year in labor costs. A robot can be purchased an installed to automate this operation. The total robot cost will be $200,000 and have no market value at the end of the 10 year period. Maintenance and operational costs for the robot are estimated to be $74,000 per year. Invested capital must earn at least 12%. Use the PW method to determine if this is a good investment. What is the PW.
Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It...
Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000...
In year​ 0, an electrical appliance company purchased an industrial robot costing​ $350,000. The robot is...
In year​ 0, an electrical appliance company purchased an industrial robot costing​ $350,000. The robot is to be used for welding​ operations, classified as​ seven-year recovery​ property and has been depreciated by the MACRS method. If the robot is to be sold after five​ years, compute the amounts of gains​ (losses) for the following two salvage values​ (assume that both capital gains and ordinary incomes are taxed at​ 21%): ​(a)​ $20,000 ​(b)​ $99,000 (a) If the robot is to be...
A piece of machinery costs $7,500 and has no salvage value after it is installed. The...
A piece of machinery costs $7,500 and has no salvage value after it is installed. The manufacturer’s warranty will pay the first year’s maintenance and repair costs. In the second year, maintenance costs will be $900, and they will increase by $900 in subsequent years. Also, operating expenses for the machinery will be $500 in the first year and will increase by $400 in the following years. If interest rate is 8%, find economic life of the machinery and the...
Machine X costs $20,000 with annual maintenance costs of $700/year and a salvage value of $3000...
Machine X costs $20,000 with annual maintenance costs of $700/year and a salvage value of $3000 at the end of a 5 year useful life. Machine Y costs $30,000 with $500 maintenance cost the first year, $575 the 2nd year, increasing by $75 each following year. There is a salvage value of $8000 at the end of a 10-year useful life. Assume these machines will be needed for at least 20 years. Assume that the costs will not change during...
A company has purchased a piece of equipment today for $5,000. It is expected that theequipment...
A company has purchased a piece of equipment today for $5,000. It is expected that theequipment will save them $1000 beginning in year 5 with the savings increasing by $200 eachyear thereafter. The equipment will require $1000 worth of maintenance in year 6. Given theequipment has a life of 10 years will the company recover their investment? Assume an interestrate of 6%. Draw the cash flow diagram.
1- Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in...
1- Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in year three, $1,200 in year four and amounts increasing by $200 per year thereafter through year nine. At an interest rate of 12% per year, calculate the equivalent future worth at year 9. 2- The costs of fuel for a smelting operation are expected to be $50,000 in year three, $52,500 in year four and amounts increasing by 5% per year thereafter through year...
Scholastic Co. is evaluating different equipment. Machine A costs $85,000 per year has a four-year life,...
Scholastic Co. is evaluating different equipment. Machine A costs $85,000 per year has a four-year life, and costs $45,000 per year to operate. The machine will be depreciated using straight-line and the relevant discount rate is 8%. The machine will have a salvage value of $20,000 at the end of the project's life. The firm has a tax rate of 21%. Calculate the operating cash flow in year 1. (Enter a negative value)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT