Establish a new machine to automate a meatpacking process

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IBP inc is considering establishing a new machine to automate a meatpacking process. The machine will save $50,000 in labor annually. The machine can be purchased today for $200,00 and will be used for 10 years. It has a salvage value of $10,000 at the end of its useful life. The new machine will require an annual maintenance cost of $9000. The corporation has a minimum rate of return of 10%. Do you recommend automating the process ?

Reference no: EM13213476

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