Considering two robots to reduce costs in production line

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Reference no: EM131905682

An industrial engineer at a fiber optic manufactur- ing company is considering two robots to reduce costs in a production line. Robot X will have a first cost of $82,000, an annual maintenance and oper- ation (M&O) cost of $30,000, and salvage values of $50,000, $42,000, and $35,000 after 1, 2, and 3 years, respectively. Robot Y will have a first cost of $97,000, an annual M&O cost of $27,000, and salvage values of $60,000, $51,000, and $42,000 after 1, 2, and 3 years, respectively. Which robot should be selected if a 2-year study period is used at an interest rate of 15% per year?

Reference no: EM131905682

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