Modern material handling system

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Reference no: EM132007484

An airport needs a modern material handling system for facilitating access to and from a busy maintenance hanger. A second-hand system will cost $75,000. A new system with improved technology can decrease labor hours by 20% compared to the used system. The new system will cost $150,000 to purchase and install. Both systems have a useful life of five years. The market value of the used system is expected to be $15,000 in five years, and the market value of the new system is anticipated to be $60,000 in five years. Current maintenance activity will require the used system to be operated 8 hours per day for 20 days per month. If labor costs $40 per hour and the MARR is 11% per month, which system should be recommended?

Please answer using excel functions and show formulas used.

Reference no: EM132007484

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