31. Autobot Systems Inc. Is evaluating three robot proposals for use in its assembly line. Information regarding these proposals are as follows:   Robot 1 Robot 2 Robot 3 Initial Cost P2 000 000.00 P3 000 000.00 P1 500 000.00 Annual Operating Cost 150 000.00 200 000.00 100 000.00 Annual Savings 1 200 000.00 1 300 000.00 1 200 000.00 Useful Life, years 3 6 2 Assuming a salvage value of 10% and a 17% MARR, determine which robot should be preferred using AW analysis.            (Ans. AT1=P201 367.37; AT2=P296 740.03; AT3=P222 880.18; select robot 2)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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31. Autobot Systems Inc. Is evaluating three robot proposals for use in its assembly line. Information regarding these proposals are as follows:

 

Robot 1

Robot 2

Robot 3

Initial Cost

P2 000 000.00

P3 000 000.00

P1 500 000.00

Annual Operating Cost

150 000.00

200 000.00

100 000.00

Annual Savings

1 200 000.00

1 300 000.00

1 200 000.00

Useful Life, years

3

6

2

Assuming a salvage value of 10% and a 17% MARR, determine which robot should be preferred using AW analysis.  

         (Ans. AT1=P201 367.37; AT2=P296 740.03; AT3=P222 880.18; select robot 2) 

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