Late night call: You get a late-night call from a friend in Southeast Asia. You can barely hear what he's saying given the loud music. He says he's using your music from 3XT2 since it helps productivity. But, he wants to know if he texts you the following info:
Automated Manufacturing Line: auto-feed machine has an initial cost of 220,685,000 IDR or roughly $23,000 USD, estimated salvage value of 38,380,000 IDR or $4,000, predicted life of 10 years, 10 people to operate at an average wage of $1 per hour, 8 tons per hour of produced output, Annual maintenance and operating (O&M) costs are expected to be $3,500.
Manual Driven Line: first cost of $8,000, no salvage value, 5-year life, output of 6 tons per hour of product, 20 people to operate at an average wage of $0.6 per hour, O&M of $1,500 per year.
I evaluate projects at 10% per year. I anticipate producing just short of 1,000 tons per year.
13. You text back that he should choose the [Auto or Manual] option.
14. Because the breakeven point between the options is roughly [tons produced per year].
