Answer to number 7

4. (25 points) The company you work for is considering automating a process with a robot that is now done manually. The current cost of labor for this process is $50,000/'year. If you automate the labor will fall to $10,000 yr, but you will have an additional S5000/yr for maintenance costs. The robot costs SIOO,OOO and is depreciated using a 7-year recovery period. The project will only last for 5 years at which time you will sell the robot for S 10,000. Use a tax rate and calculate the cashflow for each year of the 5-year project. Payback 5. (5 points) What is the Payback for the investment in problem 4? Net Present Value 6. (5 points) What is Net Present Value (NPV) at 10% for the investment in problem 4? Is this a good investment? Internal Rate of Return 7. (5 points) What is the Internal Rate of Return (IRR) for the investment in problem 4? Is this a good investment at a MARR of 10%?