4) (10 Points) A company plans to replace its manual production system with an automated one. Currently 5 people (2 on first shift, 2 on second, and one on third) are used. Their annual wages are \$31,250 per person. Operating and maintenance of the new automated system will be 5.5% of the first cost of the system. The income tax rate is 40% and straight-line depreciation will be used over a 15-year life with no salvage. The company uses a MARR of 9%. How much can be spent on the new system?
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- First shift: 2 people * 8 hours/day * 5 days/week * 52 weeks/year * wage per hour - Second shift: 2 people * 8 hours/day * 5 days/week * 52 weeks/year * wage per hour - Third shift: 1 person * 8 hours/day * 5 days/week * 52 weeks/year * wage per hour Show more…
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