Faced with rising pressure for $14 per hour minimum wage rate, the farming industry is currently exploring the possible use of robotics to replace some farm workers. The Lettuce Techis one such robot; its job is to thin out a field of lettuce, removing the least promising buds of lettuce. By removing these weaker plants, the stronger lettuce plants have more room to grow. Assume the following facts: One Lettuce Tech would do the work of 25 farm workers. 2. Each farm worker typically works 45 hours on the lettuce thinning process each year. 3. Each farm worker would earn $14 per hour plus 7.65% payroll tax. 4. The Lettuce Tech is estimated to cost $6,000 plus $900 for delivery. 5. Annual costs of operating the Lettuce Tech are expected to be $1,200. While the Lettuce Tech itself may be in workable condition for up to five years, assume that the farm would view its implementation as a one-year experiment. Requirement Perform a cost-benefit analysis for the first year of implementation to determine whether the Lettuce Tech would be a financially viable investment if the minimum wage is raised to $14 per hour. (Round your answers to the nearest whole dollar.)
Faced with rising pressure for $14 per hour minimum wage rate, the farming industry is currently exploring the possible use of robotics to replace some farm workers. The Lettuce Techis one such robot; its job is to thin out a field of lettuce, removing the least promising buds of lettuce. By removing these weaker plants, the stronger lettuce plants have more room to grow. Assume the following facts: One Lettuce Tech would do the work of 25 farm workers. 2. Each farm worker typically works 45 hours on the lettuce thinning process each year. 3. Each farm worker would earn $14 per hour plus 7.65% payroll tax. 4. The Lettuce Tech is estimated to cost $6,000 plus $900 for delivery. 5. Annual costs of operating the Lettuce Tech are expected to be $1,200. While the Lettuce Tech itself may be in workable condition for up to five years, assume that the farm would view its implementation as a one-year experiment. Requirement Perform a cost-benefit analysis for the first year of implementation to determine whether the Lettuce Tech would be a financially viable investment if the minimum wage is raised to $14 per hour. (Round your answers to the nearest whole dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Faced with rising pressure for $14 per hour minimum wage rate, the farming industry is currently exploring the possible use of robotics to replace some farm workers. The Lettuce Techis one such robot; its job is to thin out a field of lettuce, removing the least promising buds of lettuce. By removing these weaker plants, the stronger lettuce plants have more room to grow. Assume the following facts:
|
One
Lettuce Tech
would do the work of
25
farm workers. |
|
|
2.
|
Each farm worker typically works
45
hours on the lettuce thinning process each year. |
|
3.
|
Each farm worker would earn
$14
per hour plus
7.65%
payroll tax. |
|
4.
|
The
Lettuce Tech
is estimated to cost
$6,000
plus
$900
for delivery. |
|
5.
|
Annual costs of operating the
Lettuce Tech
are expected to be
$1,200.
|
While the Lettuce Tech itself may be in workable condition for up to five years, assume that the farm would view its implementation as a one-year experiment.
Requirement
Perform a cost-benefit analysis for the first year of implementation to determine whether the
Lettuce Tech would be a financially viable investment if the minimum wage is raised to $14 per hour. (Round your answers to the nearest whole dollar.)
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