A technologist has narrowed her choice of robots to work on a hazardous material project. She must choose either the HAL or the IBM or not do the project. The HAL robot can be purchased for $110,000 and will generate $21,000 of revenue whereas for the IBM robot, the numbers are $60,000 and $12,000, respectively. Each robot has an 8 year useful life and the same maintenance costs (very small) but because of hazardous waste contamination, neither robot has a salvage value. The MARR is 6%.
a) What is the incremental IRR between these two potential projects? b) If the MARR is 6%, which robot (if any) should be purchased?
b) If the MARR is 6%, which robot (if any) should be purchased?