Saxon Products, Inc., is investigating the purchase of a robot for use on the companys assembly line. Selected data relating to the robot are provided below:

Cost of the robot	$	2,050,000
Installation and software	$	495,000
Annual savings in inventory carrying costs	$	219,000
Annual increase in power and maintenance costs	$	39,000
Salvage value in 5 years	$	79,000
Useful life		5	years

Engineering studies suggest that use of the robot will result in a savings of 34,000 direct labor-hours each year. The labor rate is $18 per hour. Also, the smoother work flow made possible by the use of automation will allow the company to reduce the amount of inventory on hand by $409,000. This inventory reduction will take place at the end of the first year of operation; the released funds will be available for use elsewhere in the company. Saxon Products has a 23% required rate of return.

Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. Determine the annual net cost savings if the robot is purchased. (Do not include the $409,000 inventory reduction or the salvage value in this computation.) Answer: $792,000

2-a. Compute the net present value of the proposed investment in the robot. Answer: $35,712

2-b. Based on these data, would you recommend that the robot be purchased? Answer: Yes

3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $84,000 more than estimated and direct labor could only be reduced by 27,000 hours per year, rather than the original estimate of 34,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Answer??

3-b. Does it appear that the company made a wise investment? Answer: No

4-a. Which of the following are intangible benefits associated with the new automated equipment? Answer: reduction in inventories, greater throughput, greater variety of products, and higher quality

4-b. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 23% rate of return. (Round your final answer to the nearest whole dollar amount.) Answer: ??

I only need assistance with the bold questions.

EXHIBIT 7B-1 Present Value of St; at EXHIBIT 78-2 Present Value of an Annuity of $1 in Arrears (-ai) Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 23% 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 0.925 0.907 0.890 0.873 0857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 2 1.886 1859 1833 1808 1.783 1759 1736 1713 1.690 1668 1647 1626 1605 1585 1566 1547 1528 1.509 1.492 1474 1457 1.440 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 3 2775 2723 2673 2624 2577 2531 2.487 2444 2402 2361 2322 2283 2246 2210 2174 2140 2106 2074 2042 2011 1981 1952 4 0.855 0.823 0.792 0.763 0735 0708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0423 0.410 4 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.798 2743 2.690 2639 2.589 2.540 2494 2.448 2.404 2362 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.328 5 4.452 43294212 4100 3.993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3274 3199 3.127 3.058 2.991 2.926 2864 2.803 2.745 2689 6 0.790 0.746 0705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 6 5242 5.076 4917 4.767 4623 4486 4355 4231 4.111 3.998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3245 3.167 3.092 3.020 2.951 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 7 7 6.002 5786 5.582 5.389 5.206 5,033 4.868 4712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3706 3.605 3.508 3.416 3.327 3.242 3.161 8 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0285 0.266 0.249 0233 0.218 0204 0.191 0.179 0.168 8 6733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4799 4639 4.487 4344 4.207 4.078 3.954 3.837 3.726 3.619 3.518 3.421 3.329 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 9 7435 7108 6.802 6.515 6.247 5.995 5.759 5.537 5328 5.132 4946 4772 4.607 4.451 4303 4163 4031 3.905 3786 3.673 3.566 3.463 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0208 0191 0.176 0.162 0.149 0137 0126 0116 0.107 10 8111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5216 5.019 4.833 4.659 4.494 4339 4192 4.054 3.923 3.799 3.682 3.571 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 11 8.760 8.306 7.887 74997139 6.805 6.495 6.207 5.938 5.687 5.453 5.234 5.029 4.836 4.656 4.486 4.327 4.177 4.035 3.902 3.776 3.656 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0137 0124 0.112 0.102 0.092 0.083 0.076 0.069 12 9.385 8863 8.384 7943 7536 7161 6.814 6.492 6.194 5.918 5.660 5.421 5197 4988 4793 4.611 4439 4278 4127 3.985 3.851 3.725 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 13 9.986 9.394 8.853 8.358 7.904 7487 7103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4715 4.533 4.362 4203 4.053 3.912 3.780 14 0.577 0.505 0.442 0.388 0.340 0299 0.263 0232 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 14 10.563 98999295 8.745 8244 7786 7.367 6.982 6.628 6.302 6.002 5724 5.468 5229 5.008 4.802 4.611 4432 4.265 4108 3.962 3.824 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 15 11.118 10.380 9712 9108 8.559 8,061 7606 7191 6.811 6.462 6142 5.847 5.575 5.324 5.092 4.876 4675 4.489 4.315 41534.001 3.859 16 0.534 0.458 0.394 0.339 0.292 0252 0218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 16 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 6.604 6.265 5.954 5.668 5.405 5.162 4.938 4730 4.536 4.357 4189 4.033 3.887 17 0.513 0.436 0.371 0.317 0270 0231 0.198 0.170 0.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 17 12.166 11.274 10.477 9763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6.047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 4.219 4.059 3.910 18 0.494 0.416 0.350 0296 0.250 0212 0.180 0.153 0130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 18 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7702 7250 6.840 6.467 6.128 5.818 5534 5.273 5.033 4.812 4608 4.419 4.243 4.080 3.928 19 0.475 0.396 0.331 0.277 0.232 0.194 0164 0138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 19 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7839 7366 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 4.635 4442 4.263 4.097 3.942 20 0.456 0.377 0.312 0.258 0.215 0.178 0149 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0016 0.014 0.012 20 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7963 7.469 7025 6.623 6.259 5.929 5.628 5.353 5101 4.870 4.657 4.460 4.279 4.110 3.954 21 0.439 0.359 0.294 0242 0.199 0164 0135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0,022 0.018 0.015 0.013 0.011 0.009 21 14.029 12.821 11.764 10.836 10.017 9292 8649 8075 7562 7102 6.687 6.312 5.973 5665 5384 5.127 4.891 4675 4476 4.292 4121 3.963 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 22 14.451 13.163 12.042 11.061 10.201 9.442 8.7728.176 7645 7170 6743 6.359 6.011 5.696 5.410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 23 0.406 0.326 0262 0.211 0.170 0138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 23 14.857 13.489 12.303 11.272 10.371 9.580 8.883 8266 7718 7230 6792 6.399 6.044 5723 5.432 5.167 4.925 4.703 4.499 4.311 4.137 3.976 24 0.390 0.310 0.247 0.197 0.158 0.126 0102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 24 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 7784 7.283 6.835 6.434 6.073 5746 5.451 5.182 4.937 4713 4.507 4.318 4.143 3.981 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.009 0.007 0.006 0.005 0.004 25 15.622 14.094 12.783 11.654 10.675 9.8239.077 8.422 78437330 6.873 6.464 6.097 5766 5.467 5.1954.948 4.721 4.514 4.323 4.147 3.985 26 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 26 15.983 14.375 13.003 11.826 10.810 9.929 9.161 8.488 7.896 7372 6.906 6.491 6.118 5783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 27 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 27 16.330 14.643 13.211 11.987 10.935 10.027 9237 8548 7943 7409 6.935 6.514 6.136 5798 5492 5.215 4964 4.734 4.524 4332 4154 3.990 28 0.333 0255 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 28 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7984 7441 6.961 6,534 6.152 5.810 5.502 5.223 4970 4.739 4.528 4335 4157 3.992 29 0.321 0243 0185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 29 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4.1593.994 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7496 7003 6.566 6.1775.829 5.517 5.235 4.979 4.746 4534 4339 4.160 3.995 40 0208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 40 19.793 17159 15.046 13.332 11.925 10757 9779 8.951 8.244 7634 7105 6.642 6.233 5.871 5.548 5.258 4 997 4.760 4.544 4.347 4166 3.999