Using laser technology to speed up and eliminate waste

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Reference no: EM131186391

A large food-processing corporation is considering using laser technology to speed up and eliminate waste in the potato-peeling process. To implement the system, the company anticipates needing $2.5 million to purchase the industrial-strength lasers. The systems will save $1,200,000 per year in labor and materials. However, it will require an additional operating and maintenance cost of $275,000. Annual income taxes will also increase by $145,000. The system is expected to have a 10-year service life and will have a salvage value of about $225,000. If the company’s MARR is 10%, justify the economics of the project based on:

(a) PE method

(b) FE method

Reference no: EM131186391

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