Two flight guidance systems are being evaluated for a backup control tower at a local airport One system utilizes conventional radar, and the second uses a global positioning system (GPS) The life of both systems is 6 years, and the MARR is 12 per year Based on the internal rate of return criterion, which guidance system would you recommend Radar GPS GPS Capital investment Annual expenses Salvage value $300,000 $450,000 30,000 40,000 80,000

Question: Two flight guidance systems are being evaluated for a backup control tower at a local airport. One system utilizes conventional radar, and the second uses

Two flight guidance systems are being evaluated for a backup control tower at a local airport. One system utilizes conventional radar, and the second uses a global positioning system (GPS). The life of both systems is 6 years, and the is 12% per year. Based on the criterion, which guidance system would you recommend?

Radar GPS GPS Capital investment Annual expenses Salvage value $300,000 $450,000 30,000 40,000 80,000

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