Question

If a total capital investment of $150,000 is required for a robot and accessories, the annual labor costs replaced by the robot is $25,000, the annual maintenance cost for the robot is $1,000, the fractional speedup is 150 percent and the annual depreciation is $20,000? Which of the following is the payback period based on the formula in Supplement B for evaluating a robotic investment?
A. About 4.3 years
B. About 3.5 years
C. About 2.6 years
D. About 1.6 years
E. About 0.4 years

Answer

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