Payback, EUAC and ROI method

Payback method:

The duration taken to equal the initial investment and net accumulated cash flow in the development of a robot is called as payback period or payback method. If the net annual cash flows are identical to every year, then it can be stated by a formula given below.

Payback period = Investment Cost / Net Annual Cash Flow

EUAC method:

The EUAC is the short form of Equivalent Uniform Annual Cost method. It is used to alter thetotal cash flows and investments into the equivalent uniform costs over the expected time of developing a robot. It is done by employing different interest features that are connected with the calculations of engineering economy.

ROI method:

The Return on Investment is the expansion of ROI method. It is used to determine the return ratio of the current project, which is related to the anticipated expenditures and profits. If the rate of return is low to the expected cost of a company, then the investment made is accepted.

Three methods to develop a robot with profit

Before starting the development of a robot, some of the data must be collected to carry out economic analysis effectively. They are:

·Type of robot to be installed. ·Cost to install a robot.

·Time taken to produce a robot.

·Savings and benefits in the development.

In an industry, the investment put on the development of a robot can be compared and analyzed by three common methods such as:

·Payback method

·EUAC (Equivalent Uniform Annual Cost) method ·ROI (Return on Investment) method