Assignment $8-$ROR

TWO computer systems are being evaluated for a $4-$year project.

System SUN costs $$0K$ now and need to be updated every year $($yrs$\mathrm{.}1,2,3)$ at a

payment of $15$ K per year.

System DELL costs $$37K$ now and requires no additional costs.

If MARR is $7\%,$ determine ROR and make a decision. $[$Hint: there are no benefits,

but go thru the steps as given in notes, things will fall into place.

$($Also$,$ even the project life is $4$ years, there are no cash flows after year $3.$

Therefore, $n=3]$

a$.$ Draw the cash flow diagrams for the alt.

b$.$ Create the cash flow table

c$.$ Add $\frac{?}{{?}_{\frac{?}{?}}CF}$ column

d$.$ Draw the $\frac{?}{{?}_{\frac{?}{?}}CF}$ flow diagram.

e$.$ Calculate ROR

f$.$ Apply criteria

g$.$ Make decision

a$.$ Draw the cash flow diagrams for the two alternatives.

a$.$ Draw the cash flow diagrams for the two alternatives.

System SUN

System DELL

b$.$ Complete the cash flow table & the differential cash flow $(10$ points$)$

Assignment $8-$ROR

TWO computer systems are being evaluated for a $4-$year project.

System SUN costs $$0$K now and need to be updated every year $($yrs$\mathrm{.}1,2,3)$ at a

payment of $15$ K per year.

System DELL costs $$37K$ now and requires no additional costs.

If MARR is $7\%,$ determine ROR and make a decision. $[$Hint: there are no benefits,

but go thru the steps as given in notes, things will fall into place.

$($Also$,$ even the project life is $4$ years, there are no cash flows after year $3.$

Therefore, $n=3]$

a$.$ Draw the cash flow diagrams for the alt.

b$.$ Create the cash flow table

c$.$ Add $\frac{?}{{?}_{\frac{?}{?}}CF}$ column

d$.$ Draw the $\frac{?}{{?}_{\frac{?}{?}}CF}$ flow diagram.

e$.$ Calculate ROR

f$.$ Apply criteria

g$.$ Make decision

a$.$ Draw the cash flow diagrams for the two alternatives.