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A robot was purchased to replace a human worker on an assembly line. The robot costs $100,000 (today's dollars) and is expected to be sold

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A robot was purchased to replace a human worker on an assembly line. The robot costs $100,000 (today's dollars) and is expected to be sold at EOY 10 for $20,000 (EOY 10 dollars). The worker that is being replaced by the robot is currently being paid a $30,000 per year salary. This salary is expected to increase by 10% each year. Operating \& maintenance costs are currently $10,000 and are expected to escalate at 7% year per year. Inflation is 7% and the market interest rate is 10%. (a) What are the actual and real cashflows (in today's dollars) from years 0 to 10 ? Construct a table to summarise the cashflows ( 3 marks) (b) Calculate the present worth of the investment in actual dollars ( 2 marks) (c) Calculate the present worth of the investment in real (today's) dollars (1 mark)

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