Fort Belvoir, VA is considering the purchase of a new $300k machine to assist with sorting recyclables at its post transfer station
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Fort Belvoir, VA is considering the purchase of a new $300k machine to assist with sorting recyclables at its post transfer station. The machine is anticipated to increase transfer station maintenance costs by $5,000 per year and generate savings of $15,000 per year (from reducing the required number of employees) for the entirety of its economic useful life of 10 years. The installation anticipates the machine will have a $150k salvage value at the end of year 10. If FBVA’s MARR for this period is 8%, is the robot a good investment? Why or why not?