Question
A large automobile manufacturer is considering the installation of a high-tech material handling system for $30,000,000.The system will save $7,500,000 per year in manual labor,
A large automobile manufacturer is considering the installation of a high-tech material handling system for $30,000,000.The system will save $7,500,000 per year in manual labor, and it will incur $2,750,000 in annual operating and maintenance expenses.The salvage value at the end of the system's 10-year life is estimated to be $1,000,000.If the company's MARR is 12% per year, is the decision to invest in the new system more sensitive to errors in estimating the installation cost of the system or to errors in estimating annual labor savings?Be sure to explain the reasoning behind your decision.
please no excel, try by hand step by step if you can
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