2. An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. Defender Challenger Current MV Required upgrade Annual expenses Remaining useful life MV at end of useful life $38,000 $2,000 $1,400 6 years -$1,500 Purchase price Installation cost Annual expenses Useful life $51,000 $5,500 $1,000 10 years $7,000 MV at end of useful life The company's before-tax MARR is 20% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time.
2. An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. Defender Challenger Current MV Required upgrade Annual expenses Remaining useful life MV at end of useful life $38,000 $2,000 $1,400 6 years -$1,500 Purchase price Installation cost Annual expenses Useful life $51,000 $5,500 $1,000 10 years $7,000 MV at end of useful life The company's before-tax MARR is 20% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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