Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is, $73,000 per year. A clever industrial engineer found that by spending $16,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, determine the present worth of the savings due to the reconfiguration. (Hint: Include the reconfiguration cost.)
Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is, $73,000 per year. A clever industrial engineer found that by spending $16,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, determine the present worth of the savings due to the reconfiguration. (Hint: Include the reconfiguration cost.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Costs associated with the manufacture of miniature
high-sensitivity piezoresistive pressure transducers
is, $73,000 per year. A clever industrial engineer
found that by spending $16,000 now to reconfigure
the production line and reprogram two of the robotic
arms, the cost will go down to $58,000 next
year and $52,000 in years 2 through 5. Using an
interest rate of 10% per year, determine the present
worth of the savings due to the reconfiguration.
(Hint: Include the reconfiguration cost.)
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