Question

If a total capital investment of $500,000 is required for a robot and accessories, the annual labor costs replaced by the robot is $30,000, the annual maintenance cost for the robot is $2,000, the fractional speedup is 90 percent and the annual depreciation is $10,000, which of the following is the payback period based on the formula in Supplement B for evaluating a robotic investment?
A. About 10.8 years
B. About 6.9 years
C. About 5.9 years
D. About 2.6 years
E. About 0.2 years

Answer

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