A robot can be purchased and installed to automate an assembly operation at a software company. The gross income from th
Posted: Fri Jul 01, 2022 7:36 am
A robot can be purchased and installed to automate an assemblyoperation at a software company. The gross income from thisautomated process are estimated to be RM400,000 per year. The robotwill cost RM800,000 with no market value at the end of its 10-yearlife. The robot, if required, will be depreciated usingstraight-line depreciation method. Maintenance and operationexpenses of the robot are estimated to be RM256,000 per year. Thecompany has an effective income tax of 40%. Invested capital mustearn at least 8%after income taxes are taken into account. Evaluatethis investment using appropriate method.