A robot cell has been proposed for a certain industrial operation. The robot cell will cost $130,000 installed. Operating costs are estimated to be $14,000 per year for the 4-year expected life of the project. Revenues will be generated from the installation of $60,000 per year. For purposes of the analysis, the robot will have a sero salvage value at the end of the 4 year project is figured into the analys.
(a) Determine the payback period and the rate of return from the investment.
(b) If the robot has a purchase price of $60,000, engineering and installation costs for the project are $70,000, an expected life of 6 years, and the appropiate salvage value of the robot will have a zero salvage value, determine the payback period adn the rate of return from the investment.
(c) Given that the company uses a minimum attractive rate of return of 25%, determine the equivalent uniform annual cost for the proposed project, if the salvage value is figured into the problem.