Question
The robotics used on the heavy truck gear line will produce total benefits of $571, 000 (in today's dollars) over the next 5 years. The
The robotics used on the heavy truck gear line will produce total benefits of $571, 000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $395,000(also in today's dollars) over that same time period. An initial cash investment of $228,400 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $71,000.
Show how Ken will apply marginalcost-benefit analysis techniques to determine the following:
a.The marginal (added) benefits of the proposed new robotics.
b.The marginal (added) cost of the proposed new robotics.
c.The net benefit of the proposed new robotics.
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