3. A municipal police department has decided to acquire an unmanned drone for aerial surveillance of a high crime area of their city. Three drones are being studied. Cost data is as shown below. Project life is five years, and anticipated salvage value is zero. Doing nothing is not an option. At a MARR of 10%, which alternative should be chosen? Use incremental present worth analysis. E Alternative A B C Up Front Cost $740,000 $1,840,000 $540,000 Annual Cost $361,940 $183,810 $420,000 Life (years) 5 5 5

3. A municipal police department has decided to acquire an unmanned drone for aerial surveillance of a high crime area of their city. Three drones are being studied. Cost data is as shown below. Project life is five years, and anticipated salvage value is zero. Doing nothing is not an option. At a MARR of 10%, which alternative should be chosen? Use incremental present worth analysis. E Alternative A B C Up Front Cost $740,000 $1,840,000 $540,000 Annual Cost $361,940 $183,810 $420,000 Life (years) 5 5 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. A municipal police department has decided to acquire an unmanned drone for aerial surveillance of
a high crime area of their city. Three drones are being studied. Cost data is as shown below.
Project life is five years, and anticipated salvage value is zero. Doing nothing is not an option.
At a MARR of 10%, which alternative should be chosen? Use incremental present worth analysis.
Life (years)
Alternative
A
B
C
Up Front Cost
$740,000
$1,840,000
$540,000
Annual Cost
$361,940
$183,810
$420,000
555

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