By installing some elaborate inspection equipment on its assembly line, the Robot Corp. can avoid hiring an

Question:

By installing some elaborate inspection equipment on its assembly line, the Robot Corp. can avoid hiring an extra worker who would have earned $26,000 a year in wages and an additional $7500 a year in employee benefits. The inspection equipment has a 6-year useful life and no . Use a nominall8% interest rate in your calculations. How much can Robot afford to pay for the equipment if the wages and worker benefits would have been paid?
(a) At the end of each year
(b) Monthly
(c) Continuously
(d) Explain why the answers in (b) and (c) are larger than in (a).
Assume the matches the way the wages and benefits would have been paid (i.e., annually, monthly, and continuously, respectively).
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