*DO NOT USE EXCEL *Use Tabulated Factors *Solve Using Present Worth

Walker Systems is planning on replacing some servers that handle geological modeling. The new servers will cut down on energy costs, and improve productivity. They've contacted vendors have narrowed it down to two alternatives, IBM and HP server farms. HP IBM Initial Cost $100,000 $125,000 Annual Savings $7,500 $8,000 Annual Maintenance Cost $1000 in year one, $500 in year one, increasing increasing by 8% per year by $50 per year Product Life 4 years 6 years Resale Value $24,000 $15,000 If MARR is 8%, which server farm should they choose