help with this economics homework?

[Claudia]

Describe the effects of the following actions on the a) balance sheet and b) income statement for the firm. Tell me how much the impacts will be.

A.)The company elects to install robots to reduce the number of direct labor workers. It will pay $300,000 for these robots by borrowing the money from a bank under a 3 year loan at 10% interest per year. The 5 displaced workers will be terminated. They are paid $17.00 per hour and incur a 30% cost for fringe benefits.


B.)Fun Cars, Inc. has found a new supplier of diesel engines for its vehicles that are less expensive. They have 20 of the current engines which each cost $1200.00 in inventory now. The new engines will require different tooling that will cost a total of $25,000 to handle and install these different engines. Fun Cars is projected to build and sell 25 vehicles per month for the next two years. The new engines cost $1,025 each and will have equivalent performance. Should the company make the change and what effect will