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Question: An existing robot is used in a commercial material laboratory to handle ceramic samples in the high temperature environment that is part of several test procedures. Due to changing customer needs, the robot will not meet future service requirements unless it is upgraded at a cost of $2,000. Because of this situation, a new advanced technology robot has been selected for potential replacement of the existing robot. The accompanying estimates have been developed from information provided by some current users of the new robot and data obtained from the manufacturer. The firm's before-tax MARR is 25% per year. Based on this information, should the existing robot be replaced? Assume that a robot will be needed for an indefinite period.

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Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92315505

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