Konica Minolta plans to sell a copier that prints documents on both sides simultaneously, cutting in half the time it takes to complete big commercial jobs. The faster copier is expected to increase profit by $2,500,000 per year, regardless of which of the following rollers the company uses in its copiers. The estimated costs associated with chemically treated vinyl rollers and fiber-impregnated rubber rollers are shown below. Determine which of the roller types should be selected on the basis of an ROR analysis assuming the company’s MARR is 25% per year. Roller Type Treated Impregnated First cost, $1000 −5000 −6500 Annual cost, $1000/year −1000 −650 Salvage value, $1000 100 200 Life, years 5 5
Konica Minolta plans to sell a copier that prints
documents on both sides simultaneously, cutting
in half the time it takes to complete big commercial
jobs. The faster copier is expected to increase
profit by $2,500,000 per year, regardless of which
of the following rollers the company uses in its
copiers. The estimated costs associated with chemically
treated vinyl rollers and fiber-impregnated
rubber rollers are shown below. Determine which
of the roller types should be selected on the basis
of an ROR analysis assuming the company’s
MARR is 25% per year.
Roller Type Treated Impregnated
First cost, $1000 −5000 −6500
Annual cost, $1000/year −1000 −650
Salvage value, $1000 100 200
Life, years 5 5
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