Explain step by step how they calculated the PW and AW of the 12% MARR and how did they concluded that server 2 is the better option (not by using Excel or a spreadsheet!)

ROR ANALYSIS WITH ESTIMATED LIVES THAT VARY

Information:

There are two alternative computers that can provide the server function for the software interfaces and shared database updates on the manufacturing floor while Make-to-Specs is operating in parallel mode. The server's first cost and estimated contribution to annual net cash fis are summarized below.

The life estimates were developed by two different individuals: a design engineer and a manufacturing manager. They have asked that, at this stage of the project, all analyses be performed using both life estimates for each system.

Case Study Exercises

1. If the MARR = 12%, which server should be selected? Use the PW or AW method to make the selection.

Explain step by step how they calculated the PW and AW of the 12% MARR and how did they concluded that server 2 is the better option (not by using Excel or a spreadsheet!)

ROR ANALYSIS WITH ESTIMATED LIVES THAT VARY 1. PW at 12% is shown in row 29 . Select server #2(n=8) with the largest PW value. 2. #1(n=3) is eliminated. It has i$0.05.i is infinity, as shown in cell K45, where an error for IRR(K4:K44) is indicated. ROR ANALYSIS WITH ESTIMATED LIVES THAT VARY 1. PW at 12% is shown in row 29 . Select server #2(n=8) with the largest PW value. 2. #1(n=3) is eliminated. It has i$0.05.i is infinity, as shown in cell K45, where an error for IRR(K4:K44) is indicated