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A hospital would replace five personnel that currently cover three shifts per day. 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes. Combined federal and state income taxes are 40%. Annual property taxes and maintenance are 2.5 and 4% of investment, respectively. Depreciation is 15-year straight line. Disregarding inflation, how large an investment in the automation project can be economically justified?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91234036

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