You require an additional robot for your manufacturing facility. For your application, you have found two robots that meet your specifications; an OTC and a Denso. You may borrow money for this purchase at 3.8% APR compounded monthly for six years. Comparing Net Present Values, which one should you buy? Include a Cash flow diagram for each purchase option.
A) OTC robot initial cost= $74,500
Monthly consumbale costs= $379
Estimated 7-year salvage value= $7,500
B) Denso robot: initial cost= $86,000
Monthly consumable costs= $199
Estimated 7 year salvage value= $5,000