A medium sized municipality wants to develop an intelligent software system to assist in project selection during the next 10 years. A life-cycle cost approach has been selected to categorize costs into development, programming, operating, and support costs for each alternative. There are three alternatives under consideration identified as A (tailored system), B (adapted system), and C (current system). The costs are summarized below. Using a present worth analysis and an interest rate of 10% per year, select the best alternative.

Alternative Cost Component Cost A Development

$100,000 now, $150,000 year I Programming $45,000 now, $35,000 year 1 Operation $50,000 in years 1 through 10 Support $30,000 in years 1 through 10 B Development $10,000 now Programming $45,000 year 0, $30,000 year 1 Operation $80,000 in years 1 through 10 Support $40,000 in years 1 through 10 C Operation $150,000 in years 1 through 10