An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labour. The initial cost of the robot is $ 246,431, and the annual labour savings are projected to be $ 110,471. The robot is a Class 43 property with a CCA rate of 30%. The robot will be used for seven years, at the end of which the firm expects to sell it for $ 14,914. The company's marginal tax rate is 35% and the after-tax MARR is 10%. Calculate the annual worth of this investment.
An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labour. The initial cost of the robot is $ 246,431, and the annual labour savings are projected to be $ 110,471. The robot is a Class 43 property with a CCA rate of 30%. The robot will be used for seven years, at the end of which the firm expects to sell it for $ 14,914. The company's marginal tax rate is 35% and the after-tax MARR is 10%. Calculate the annual worth of this investment.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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5.
![An automobile-manufacturing company is considering purchasing an industrial robot to
do spot welding, which is currently done by skilled labour. The initial cost of the robot
is $ 246,431, and the annual labour savings are projected to be $ 110,471. The robot
is a Class 43 property with a CCA rate of 30%. The robot will be used for seven years,
at the end of which the firm expects to sell it for $ 14,914. The company's marginal
tax rate is 35% and the after-tax MARR is 10%. Calculate the annual worth of this
investment.
(Note: Don't use the $ sign in your answer and round it to 2 decimal places)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b776694-02b7-4154-ba93-13026ecbfbef%2F81a1d69e-9c06-4880-9bfa-513514e1e972%2Fi1xyffa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An automobile-manufacturing company is considering purchasing an industrial robot to
do spot welding, which is currently done by skilled labour. The initial cost of the robot
is $ 246,431, and the annual labour savings are projected to be $ 110,471. The robot
is a Class 43 property with a CCA rate of 30%. The robot will be used for seven years,
at the end of which the firm expects to sell it for $ 14,914. The company's marginal
tax rate is 35% and the after-tax MARR is 10%. Calculate the annual worth of this
investment.
(Note: Don't use the $ sign in your answer and round it to 2 decimal places)
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