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An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected to be $1,500, with software upgrades increasing by $500
An industrial robot is purchased and installed for $85,000. Annual operating and
maintenance costs are expected to be $1,500, with software upgrades increasing by $500
per year from $5,000 in year 1. If the robot has an eight-year life, what is the present value
of the costs of owning it? Assume that the robot has no salvage value and the annual interest
rate is 10%.
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