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[Solved] – The Canadian Space Agency is considering two types of robotic arms for the Lunar Gateway. You have been asked to recommend one of the following alternatives. Using the chart below, and an effective…

Economics

[Solved] – The Canadian Space Agency is considering two types of robotic arms for the Lunar Gateway. You have been asked to recommend one of the following alternatives. Using the chart below, and an effective…

(Economics Solutions) The Canadian Space Agency is considering two types of robotic arms for the Lunar Gateway.

You have been asked to recommend one of the following alternatives. Using the chart below, and an effective interest rate of 10% per year, which robotic arm should be selected on the basis of a present worth analysis?

(All the alternatives presented below were calculated using compound interest factor tables including all decimal places).

Robotic ArmsType AType B
First Cost, $-12,600-11,000
AOC, $/yr-1,200-900
Replace Sensor in year 4, $-2,5000
Replace Sensor in year 5, $0-1,600
Salvage Value, $+1,0000
Life in Years1010
Robotic Arms Chart

Choices

  • Recommend Type B with PWB = $-14,985
  • Recommend Type A with PWA = $-21,296
  • Recommend Type B with PWB = $-17,524
  • Recommend Type A with PWA = $-7,319

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