Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please solve using hand not excel if possible thank you very much A car parts manufacturing company is considering investing in the development of a
Please solve using hand not excel if possible thank you very much
A car parts manufacturing company is considering investing in the development of a new robot. The new robot is based on a new technology, so there is some uncertainty associated with its performance level. They estimated that the new robot may exhibit high, medium, and low performance levels with the probabilities of 0.35, 0.55, and 0.10 respectively. The annual savings corresponding to high, medium, and low performance levels are $500 000, $250 000, and $150 000 respectively. The development cost of the new robot is $550 000. (a) On the basis of a five-year study period, what is the present worth of the new robot for each performance scenario? Assume that the MARR is 12 percent. (b) Construct a decision tree. On the basis of EV, should they approve the development of a new robot? A car parts manufacturing company is considering investing in the development of a new robot. The new robot is based on a new technology, so there is some uncertainty associated with its performance level. They estimated that the new robot may exhibit high, medium, and low performance levels with the probabilities of 0.35, 0.55, and 0.10 respectively. The annual savings corresponding to high, medium, and low performance levels are $500 000, $250 000, and $150 000 respectively. The development cost of the new robot is $550 000. (a) On the basis of a five-year study period, what is the present worth of the new robot for each performance scenario? Assume that the MARR is 12 percent. (b) Construct a decision tree. On the basis of EV, should they approve the development of a new robotStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started