An Piece of Automated Assembly Equipment Has an Initial Cost

question 14

Essay

An piece of automated assembly equipment has an initial cost of $64,000 and generates net annual benefits of $150,000 per year. The equipment is expected to have zero salvage value at the end of its useful life of 5 years. Using straight- line depreciation, an after- tax MARR of 2%, a federal tax rate of 39%, and a state tax rate of 9%, determine if the investment in this equipment is economically justifiable on the basis of the present worth of the EVA estimates.

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Definitions:

Power Supply

A device that converts AC voltage into DC voltage that the computer can use to power all internal and some external devices.

CPU

Central Processing Unit, the primary component of a computer that performs most of the processing inside a computer.

Higher Voltage

A term referring to electrical power at a greater potential difference, which can enhance the performance or capability of electrical devices but may require special handling.

Mac OS X El Capitan

A version of Apple's desktop operating system for Mac computers, known for enhanced performance and improved features over its predecessors.