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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 $78,000, an annual M&O cost of $31,000, and $43,000 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 $122,000 per year. The company's MARR IS 49% 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. The Incremental ROR IS The manager should select robot X

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 $78,000, an annual M&O cost of $31,000, and $43,000 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 $122,000 per year. The company's MARR IS 49% 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. The Incremental ROR IS The manager should select robot X

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 $78,000, an annual M&O cost of $31,000, and $43,000 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 $122,000 per year. The company's MARR IS 49% 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. The Incremental ROR IS The manager should select robot X
Transcribed Image Text: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 $78,000, an annual M&O cost of $31,000, and $43,000 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 $122,000 per year. The company's MARR IS 49% 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. The Incremental ROR IS The manager should select robot X
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