Hyundai USA has numerous robotic welders as well as robotic checkers with vision. One underbody robotic welder costing $1,200,000 (7-year property class) was installed and is increasing productivity by 2.5% in one area. The result is a savings of $500,000 per year. Deductible expenses other than depreciation and interest associated with the installed robotic welder are only $120,000. Hyundai borrowed $550,000 at 11% for 5 years. They plan to keep the welder for 8 years. Hyundai’s income-tax rate is 25% and their MARR is 9% after taxes. Determine the PW, IRR, for the investment if: The loan is paid back using Plan 3 Plan 3—make equal principal-plus-interest end-of-period payments.
Hyundai USA has numerous robotic welders as well as robotic checkers with vision. One underbody robotic welder costing $1,200,000 (7-year property class) was installed and is increasing productivity by 2.5% in one area. The result is a savings of $500,000 per year. Deductible expenses other than depreciation and interest associated with the installed robotic welder are only $120,000. Hyundai borrowed $550,000 at 11% for 5 years. They plan to keep the welder for 8 years. Hyundai’s income-tax rate is 25% and their MARR is 9% after taxes. Determine the PW, IRR, for the investment if: The loan is paid back using Plan 3 Plan 3—make equal principal-plus-interest end-of-period payments.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Hyundai USA has numerous robotic welders as well as robotic checkers with vision. One underbody robotic welder costing $1,200,000 (7-year property class) was installed and is increasing productivity by 2.5% in one area. The result is a savings of $500,000 per year. Deductible expenses other than
The loan is paid back using Plan 3
Plan 3—make equal principal-plus-interest end-of-period payments.
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