Installation of a high-tech handling system

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A large automobile manufacturing company is considering the installation of a high-tech handling system. The initial cost of the system is $30,000,000 and it is estimated it will save $7,500,000 per year in manual labor, and will incur $2,750,000 in annual operating and maintenance expenditures. The salvage value at the end of the system’s 10 year life is negligible. If the company’s hurdle rate (MARR) is 10% per year, should the system be recommended for implementation?

Reference no: EM13744205

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