Answered step by step
Verified Expert Solution
Question
1 Approved Answer
6. Athens Corporation (AC), a small engineering firm in the Clarke county area uses technicians to assemble its products. AC currently has Ten technicians. Each
6. Athens Corporation (AC), a small engineering firm in the Clarke county area uses technicians to assemble its products. AC currently has Ten technicians. Each year, AC spends the following on each technician: Basic salary= $35,000; Company paid life insurance= $5000, Company paid health insurance = $7000, Company paid retirement support (401k) = 12.5% of basic salary. To downsides, AC decided to replace two of its technicians with a robot. AC is planning to buy the robot and recover the loan in 10 years. AC uses an interest rate (Minimum Attractive Rate of Return-MARR) of 6% for all their investments. i. Draw a CFD showing all the numbers (the MARR, the annual benefits, P- the initial investment, and years of operations) ii. How much should AC buy this Robot, $P, to justify the purchase over the ten year period? iii. AC is also considering a second Alternative, Robot-X. Robot-X costs $8 million. If they buy this robot with the option to recover in 15 years, how many technicians can they let go? 6. Athens Corporation (AC), a small engineering firm in the Clarke county area uses technicians to assemble its products. AC currently has Ten technicians. Each year, AC spends the following on each technician: Basic salary= $35,000; Company paid life insurance= $5000, Company paid health insurance = $7000, Company paid retirement support (401k) = 12.5% of basic salary. To downsides, AC decided to replace two of its technicians with a robot. AC is planning to buy the robot and recover the loan in 10 years. AC uses an interest rate (Minimum Attractive Rate of Return-MARR) of 6% for all their investments. i. Draw a CFD showing all the numbers (the MARR, the annual benefits, P- the initial investment, and years of operations) ii. How much should AC buy this Robot, $P, to justify the purchase over the ten year period? iii. AC is also considering a second Alternative, Robot-X. Robot-X costs $8 million. If they buy this robot with the option to recover in 15 years, how many technicians can they let go
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started