Business
Business, 26.02.2020 02:52, dayday0

An auto-part manufacturing company is considering the purchase of an industrial robot to do spot welding, which is currently done by skilled labor. The initial cost of the robot is $250,000, and the annual labor savings are projected to be $125,000. Ifpurchased, the robot will be depreciated under MACRS as aseven-year recovery property. This robot will be used for five years after which the firm expects to sell it for $50,000. Thecompany's marginal tax rate is 25% over the project period. Suppose that the project requires a $30,000 investment in working capital at the beginning of the project and the entire amount will be recovered at the end of project life. Determine the net after-tax cash flows for each period over the project life. Assume MARR equals= 15%

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An auto-part manufacturing company is considering the purchase of an industrial robot to do spot wel...

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