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A manufacturing process can be designed for varying degrees of automation. The following is relevant cost information: ________________________________________________________________________ Degree of Automation A B C D

A manufacturing process can be designed for varying degrees of automation. The following is relevant cost information:

________________________________________________________________________

Degree of Automation A B C D

________________________________________________________________________

First Cost $22,000 $24,000 $28,000 $40,000

Annual Labor Expense $19,000 $17,500 $15,000 $13,000

Annual Maint Expense $1,500 $1,800 $2,000 $2,500

________________________________________________________________________

Determine minimum equivalent uniform annual cost (EUAC) of operation for the best selection (A, B, C, or D), by after-tax analysis using an income-tax rate of 30 %, an after-tax MARR of 18 %, and SL depreciation. Assume each has a life of 8 years and no BV or MV at the end of this period.

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