Question: Problem 3 (15pt): Consider a proposal to enhance the vision system used by a postal service to sort mail. The new system is estimated to

 Problem 3 (15pt): Consider a proposal to enhance the vision system

Problem 3 (15pt): Consider a proposal to enhance the vision system used by a postal service to sort mail. The new system is estimated to cost $500,000 and will incur an additional $300,000 per year in maintenance costs. The system will produce annual savings of $450,000 each year (by decreasing the percentage of misdirected mail and reducing the amount of mail that must be sorted manually). The MARR is 10% per year, and the study period is 5 years at which time the system will be technologically obsolete. 1. (10pt) Conduct the sensitivity analysis of capital investment, annual savings, and annual expense based on the slope approach. 2. (5pt) Based on the above analysis, find the variable to which the NPV is most sensitive

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