5-34, include any formulas used yo obtain answer

4% 0.3 210 Annual increase 185 Major maintenance (Year 25) Salvage cost 30 27 5-34 Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated system would be preferred to the existing labor- intensive system. If Lobos wants to earn at least 25% and uses a 15-year planning horizon, which alterna- tive is preferred? Contributed by Paul R. McCright, University of South Florida Labor Intensive Automated Initial cost Installation cost First-year O&M Annual increase First-year labor costs Annual increase Salvage value (EOY15) $ 0 $55,000 15,500 4,800 600 41,000 4% 19,000 0 1,500 200 116,000 4% 5,000 In an analysis one alternative has a net present worth of $4200, based nn n 6 5