Question
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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