WO computer systems are being evaluated for a 4-year project. System SUN costs $0K now and need to be updated every year (yrs.1 ,2, 3) at a payment of 15K 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

| Assignment 8 -ROR c. Differential cash flow diagram d. Calculate ROR TWO computer systems are being evaluated for a 4-year project. System SUN costs $OK now and need to be updated every year (yrs.1,2,3) at a payment of 15K 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 ACF column d. Draw the ACF flow diagram. e. Calculate ROR f. Apply criteria g. Make decision d. Selection criteria: e. Decision - Choose Alt. 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) Alt. SUN Alt. DELL Year 0 Differential CF (A C.F.) 1 3 4 | Assignment 8 -ROR c. Differential cash flow diagram d. Calculate ROR TWO computer systems are being evaluated for a 4-year project. System SUN costs $OK now and need to be updated every year (yrs.1,2,3) at a payment of 15K 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 ACF column d. Draw the ACF flow diagram. e. Calculate ROR f. Apply criteria g. Make decision d. Selection criteria: e. Decision - Choose Alt. 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) Alt. SUN Alt. DELL Year 0 Differential CF (A C.F.) 1 3 4