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Using Net Present Value and Payback, Decide on a method of inspection of parts. 2 methods. One includes manual labor and the other includes an

Using Net Present Value and Payback,

Decide on a method of inspection of parts. 2 methods. One includes manual labor and the other includes an automated process.

The manual labor costs the company $30,000 per year, every year. The automated machinery costs $100,000 initially and $5,000 a year in maintenance.

The machinery will last for 7 years. Using pretax analysis and an 8% interest rate, which is preferred?

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