Products versus the cost savings in labor


Problem:

I am a senior vice president of a company that manufactures kitchen appliances. I am considering using robots to replace up to ten of my skilled workers on the factory floor. Using a spreadsheet, I need to analyze the costs of acquiring several robots to paint and assemble some of my products versus the cost savings in labor.

How many years would it take to pay for the robots from the savings in fewer employees, assuming that the skilled workers make $20 per hour, including benefits?

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Finance Basics: Products versus the cost savings in labor
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