For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and challenger. The company’s MARR is 20% per year. Based on this information? Should the existing robot be replaced now? Assume the robot will be needed for an indefinite period of time. Defender Challenger Current MV $38,000 Purchase Price $51,000 Required Upgrade $2,000 Installation Cost $5,500 Annual Expenses $1,400 Annual Expenses $1,000 Salvage Value - $1,500 Salvage Value $7,000
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box.
An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and challenger. The company’s MARR is 20% per year. Based on this information? Should the existing robot be replaced now? Assume the robot will be needed for an indefinite period of time.
|
Defender |
|
Challenger |
||
|
Current MV |
$38,000 |
|
Purchase Price |
$51,000 |
|
Required Upgrade |
$2,000 |
|
Installation Cost |
$5,500 |
|
Annual Expenses |
$1,400 |
|
Annual Expenses |
$1,000 |
|
Salvage Value |
- $1,500 |
|
Salvage Value |
$7,000 |
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