Answered step-by-stepFaced with rising pressure for a $13 per hour minimum wage...
Faced with rising pressure for a
$13
per hour minimum wage rate, the farming industry is currently exploring the possible use of robotics to replace some farm workers. The
Hired Hand
is one such robot; its job is to thin out a field of lettuce, removing the least promising buds of lettuce. By removing these weaker plants, the stronger lettuce plants have more room to grow. Assume the following facts:
1.
| One Hired Hand would do the work of 20 farm workers.
|
2.
| Each farm worker typically works 60 hours on the lettuce thinning process each year.
|
3.
| Each farm worker would earn $13 per hour plus 7.65% payroll tax.
|
4.
| The Hired Hand is estimated to cost $6,000 plus $650 for delivery.
|
5.
| Annual costs of operating the Hired Hand are expected to be $1,000.
|
While the Hired Hand itself may be in workable condition for up to five years, assume that the farm would view its implementation as a one-year experiment.
RequirementPerform a cost-benefit analysis for the first year of implementation to determine whether the
Hired Hand
would be a financially viable investment if the minimum wage is raised to
$13
per hour. (Round your answers to the nearest whole dollar.)
| Cost-Benefit Analysis | ||
| Expected Benefits (Cost Savings): | ||
| Total expected benefits | ||
| Expected Costs: | ||
| Total expected costs | ||
| Net expected benefit (cost) | ||
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