Mr. Asimov must replace the 11 robots on his assembly line. The Robo100 model co

Question

Mr. Asimov must replace the 11 robots on his assembly line. The Robo100 model costs $21893 per robot and they will last for three years. The EconoRobo model costs $10052 per robot and will last for two years. The Robo100 models will have an end of life salvage value of $9230 each. The EconoRobo models will not have any value at the end of their lives. The Robo100 models are also more energy efficient and it is estimated Mr. Asimov will be able to save a total of $3385 per year in energy costs. Mr. Asimov uses a MARR of 10% to evaluate potential investments.

Using present worth analysis, what is the present worth of the Robo100 system?

Notes:

Assume all robots on the assembly line are replaced.

Explanation / Answer

Total benefit per year is the benefit by total of ii robotsas we are told to assume that all robots are replaced.

For Robo100 For 11 Robo100 MARR 0.1 Initial Cost IC 21893 240823 Salvage value S 9230 Years n 3 Annual benefit B 3385 PW of S 6934.64 76280.99 Yearwise PW of B 1 3077.27 2 2797.52 3 2543.20 PW of B 8417.99 Net PW = PW of B + PW of S - IC -156124.01

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