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In: Economics

An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected...

An industrial robot is purchased and installed for $85,000. Annual operating and maintenance costs are expected to be $1,500, with software upgrades increasing by $500 per year from $5,000 in year 1. If the robot has an eight-year life, what is the present value of the costs of owning it? Assume that the robot has no salvage value and assume the annual interest rate is 10%.

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Solution :-

Therefore Present Value of Costs of owning it = $127,691

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Rahul Sunny answered 2 years ago
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