A software developer is planning to develop, produce and sell new security software. The key parameter...

  

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A software developer is planning to develop, produce and sell new security software. The key parameter values of the three software packages under consideration are provided below. Parameters 1. Initial Cost ($) AC 650,000 KLM 740,000 Delta 790,000 450,500 at EOY1 increasing by 1% annually to EOY5 inclusively; $470,000 at EOY6 decreasing annually by $2,000 thereafter. 350,000 at ΕΟΥ1 450,500 at ΕΟΥ1 increasing by $4,000 annually thereafter decreasing by $5,000 annually thereafter 2. Revenues ($) 252,000 at ΕΟΥ1 decreasing by 1% annually thereafter 180,000 at 300,000 at EOY1 increasing by 2% annually thereafter ΕΟΥ1 3. Operating costs ($) increasing by 2% annually thereafter 4. End-of-life 90,000 100,000 120,000 salvage value ($) 5. Useful life (years) 10 • All parameter values are fictitious. EOY = End-of-year • Industry standard for backhoes = 4 years %3D MARR = 10% 11. Delta's "project balance" at EOY3 based on the discounted payback method. 12. The best software model based on the simple payback method. 13. The best software model based on the discounted payback method. 14. KLM's benefit/cost (B/C) ratio. 15. Delta's benefit/cost (B/C) ratio. A software developer is planning to develop, produce and sell new security software. The key parameter values of the three software packages under consideration are provided below. Parameters 1. Initial Cost ($) AC 650,000 KLM 740,000 Delta 790,000 450,500 at EOY1 increasing by 1% annually to EOY5 inclusively; $470,000 at EOY6 decreasing annually by $2,000 thereafter. 350,000 at ΕΟΥ1 450,500 at ΕΟΥ1 increasing by $4,000 annually thereafter decreasing by $5,000 annually thereafter 2. Revenues ($) 252,000 at ΕΟΥ1 decreasing by 1% annually thereafter 180,000 at 300,000 at EOY1 increasing by 2% annually thereafter ΕΟΥ1 3. Operating costs ($) increasing by 2% annually thereafter 4. End-of-life 90,000 100,000 120,000 salvage value ($) 5. Useful life (years) 10 • All parameter values are fictitious. EOY = End-of-year • Industry standard for backhoes = 4 years %3D MARR = 10% 11. Delta's "project balance" at EOY3 based on the discounted payback method. 12. The best software model based on the simple payback method. 13. The best software model based on the discounted payback method. 14. KLM's benefit/cost (B/C) ratio. 15. Delta's benefit/cost (B/C) ratio.

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