Determining pay for the equipment


Response to the following problem:

By installing some elaborate inspection equipment on its assembly line, the Robot Corp. can avoid hiring an extra worker who would have earned $26,000 a year in wages and an additional $7500 a year in employee benefits. The inspection equipment has a 6-year useful life and no salvage value. Use a nominal 18% interest rate in your calculations. How much can Robot afford to pay for the equipment if the wages and worker benefits would have been paid,

a) At the end of each year

b) monthly.

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Financial Accounting: Determining pay for the equipment
Reference No:- TGS02076174

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