A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft coupli that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $44,000 salvage value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $129,000 per year. The company's MARR is 19.00% per year, and it uses a year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. (Ro the final answer to three decimal places.) The incremental ROR is %. The manager should select robot Y

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Problem 08.023- Determine which robot to select based on incremental rate of return
A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft couplings
that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $44,000 salvage
value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and
$47,000 salvage value, and it will increase revenues by $129,000 per year. The company's MARR is 19.00% per year, and it uses a 3-
year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. (Round
the final answer to three decimal places.)
The incremental ROR is
%.
The manager should select robot Y
Transcribed Image Text:Problem 08.023- Determine which robot to select based on incremental rate of return A process control manager is considering two robots to improve materials-handling capacity in the production of rigid shaft couplings that make dissimilar drive components. Robot X has a first cost of $92,000, an annual M&O cost of $31,000, and $44,000 salvage value, and it will improve revenues by $96,000 per year. Robot Y has a first cost of $146,000, an annual M&O cost of $28,000, and $47,000 salvage value, and it will increase revenues by $129,000 per year. The company's MARR is 19.00% per year, and it uses a 3- year study period for economic evaluations. Calculate the incremental ROR, and identify the robot the manager should select. (Round the final answer to three decimal places.) The incremental ROR is %. The manager should select robot Y
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