Dark Skies Observatory is considering several options to purchase a new deep-space telescope. Revenue would be generated from the telescope by selling ‘‘time and use’’ slots to various researchers around the world. Four possible telescopes have been identified in addition to the possibility of not buying a telescope if none are financially attractive. The table below details the characteristics of each telescope. A present worth ranking analysis is to be performed.

a. Determine the preferred telescope if MARR is 25 percent/year.

b. Determine the preferred telescope if MARR is 42 percent/year.

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T1 T2 T3 Useful Life First Cost 10 years 10 years 10 years T4 10 years $600,000 $800,000 $470,000 $540,000 Salvage Value $70,000 $130,000 $65,000 $200,000 Annual Revenue $400,000 $600,000 $260,000 $320,000 Annual Expenses $130,000 $270,000 $70,000 $120,000