6.21An industrial firm is considering purchasing several programmable controllers and automating the company's manufacturing operations. It is estimated that the equipment will initially cost
$120,000, and the labor to install it will cost
$25,000. A service contract to maintain the equipment will cost
$5,000per year. Trained service personnel will have to be hired at an annual salary of
$50,000. Also estimated is an approximate
$10,000annual income-tax savings (cash inflow). How much will this investment in equipment and services have to increase the annual revenues after taxes in order to break even? The equipment is estimated to have an operating life of 10 years with no salvage value (because of obsolescence). The firm's MARR is
12%.6.15 A construction firm is considering establishing an engineering computing center. The center will be equipped with three engineering workstations that cost
$45,000each, and each has a service life of five years. The expected salvage value of each workstation is
$2,000. The annual operating and maintenance cost would be
$25,000for each workstation. At a MARR of
15%. determine the equivalent annual cost for operating the engineering center.