The TechEdge Corporation offers two forms of 4-year service contracts on its closed-loop water purification system...

 

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The TechEdge Corporation offers two forms of 4-year service contracts on its closed-loop water purification system used in the manufacture of semiconductor packages for microwave and high-speed digital devices. The Professional Plan has an initial fee of $57,500 with annual fees starting at $1,000 in contract year 1 and increasing by $500 each year. Alternatively, the Executive Plan costs $62,000 upfront with annual fees starting at $1,500 in contract year 1 and decreasing by $500 each year. The initial charge is considered a setup cost for which there is no salvage value expected. Evaluate the plans at a MARR of 9% per year. Solve using factors. The present worth of the Professional Plan is $- The plan selected based on the present worth analysis is the Professional and the present worth of the Executive Plan is $- Plan. The TechEdge Corporation offers two forms of 4-year service contracts on its closed-loop water purification system used in the manufacture of semiconductor packages for microwave and high-speed digital devices. The Professional Plan has an initial fee of $57,500 with annual fees starting at $1,000 in contract year 1 and increasing by $500 each year. Alternatively, the Executive Plan costs $62,000 upfront with annual fees starting at $1,500 in contract year 1 and decreasing by $500 each year. The initial charge is considered a setup cost for which there is no salvage value expected. Evaluate the plans at a MARR of 9% per year. Solve using factors. The present worth of the Professional Plan is $- The plan selected based on the present worth analysis is the Professional and the present worth of the Executive Plan is $- Plan.

Answer rating: 100% (QA)

Answer I To evaluate the plans based on factors at a MARR of 9 per year we can make use of the Present Worth PW factor calculation which is as follows PW PAP I n Plus APF I n where P the preliminary c... View the full answer