Assignment:
1) Determine the Present worth of the following project (Buying a robot for the production facility of a startup) using the definitions below. Would you invest if your minimum acceptable rate of return (MARR) equals 8% ? (Project's life is 22 years)
A) An initial purchase of the robot costing $250,000
B) Labor savings could be modeled as a geometric series, starting from N = 1 to the end of the project's life, occurring annually. The first year's savings will be 512,000 and the second year's $12,600 (you should be able to find g from here)
C) Maintenance costs could be modeled as a linear series, starting from N = 1 to the end of the project's life, occurring annually, with the cost being zero at N = 1, and linearly increasing with a slope of G = $1,000 /year
2) Using At worth, find the annual benefit (or cost) of the project mentioned above with the addition of the following condition:
The Robot will be sold to an engineering school for $10,000 at the end of the project's life (N=22)
3) You invest 515,000 in a project, and in return receive two pay ments at:
N = 3 for $8,800 and N = 6 for $12,000
What is the rate of return or R.0.1 for this investment?