A mechanical engineer is considering building automated material-handling equipment for a production line. On one hand, the equipment would substantially reduce the manual labour currently required to move items from one part of the production process to the next. On the other hand, the equipment would consume energy, require insurance, and need periodic maintenance. Manual Labors: Yearly labour costs are $9200. Automated material-handling equipment. expected service life of 10 years. Power First cost Labour $15,000 Maintenance Taxes & Insurance $300/yr $3,300/yr $400/yr $2,400/yr If the MARR is 9%, Use a PW to make the decision (automate or not).

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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A mechanical engineer is considering building automated
material-handling equipment for a production line. On one
hand, the equipment would substantially reduce the manual
labour currently required to move items from one part of the
production process to the next. On the other hand, the
equipment would consume energy, require insurance, and
need periodic maintenance.
Manual Labors: Yearly labour costs are $9200.
Automated material-handling equipment. expected service life of 10 years.
First cost
Maintenance Taxes & Insurance
$300/yr
Labour
Power
$15,000
$3,300/yr
$400/yr $2,400/yr
If the MARR is 9%, Use a PW to make the decision (automate or not).
Transcribed Image Text:A mechanical engineer is considering building automated material-handling equipment for a production line. On one hand, the equipment would substantially reduce the manual labour currently required to move items from one part of the production process to the next. On the other hand, the equipment would consume energy, require insurance, and need periodic maintenance. Manual Labors: Yearly labour costs are $9200. Automated material-handling equipment. expected service life of 10 years. First cost Maintenance Taxes & Insurance $300/yr Labour Power $15,000 $3,300/yr $400/yr $2,400/yr If the MARR is 9%, Use a PW to make the decision (automate or not).
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