The basis of future worth comparison at an interest rate

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Reference no: EM131300078

An industrial engineer is considering two robots for purchase by a fiber-optic manufacturing company. Robot A will have a first cost of $90,000, an annual maintenance and operation cost of $35,000, and a $45.000 salvage value. Robot B will have a first cost of $120,000, an annual maintenance and operation cost of $25,000, and a $60,000 salvage value. Which should be selected on the basis of a future worth comparison at an interest rate of 18% per year? Use a 4-year study period. Draw the cash flow diagrams for Robot A and Robot B.

Reference no: EM131300078

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