https://www.youtube.com/watch?v=QfbdVboVNUM

As an engineering manager, you want to recommend an automated palletizer robot in the small manufacturing plant. You also want to go slow and get this tested out over time, then scale up. You see this as a Life Cycle cost analysis:

Year 0 - Initial Investment $101,000 - Capital Expenditure

Year 1 - Testing and Evaluation - $8,000 - Single Expense

Year 2 - Eliminate 1 Operator mid-year and Save $25,000 of his remaining Year 2 salary.

Year 3 (to year 8) - Full Year Implementation Savings of Operator annual salary $32,000. Assume operator would have received a 4% annual raise each following year.

Year 2-8 - Maintenance is required at $4,000 per year going up at $220 per year.

What is the Rate of Return on this project?