The expected net salvage value of the system

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Camptown? Togs, Inc., a? children's clothing? manufacturer, has always found payroll processing to be costly because it must be done by a clerk. The number of? piece-goods coupons received by each employee is collected and the types of tasks performed by each employee are calculated. Not long? ago, an industrial engineer designed a system that partially automates the process by means of a scanner that reads the? piece-goods coupons. Management is enthusiastic about this? system, because it utilizes some personal computer systems that were purchased recently. It is expected that this new automated system will save ?$50,000 per year in labor. The new system will cost about ?$27,000 to build and test prior to operation. It is expected that operating? costs, including income? taxes, will be about ?$4,000 per year. The system will have a? five-year useful life. The expected net salvage value of the system is estimated to be ?$2,500. Assume that the cash flows occur continuously throughout the year.

Reference no: EM131244344

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