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You are charged with choosing a vendor to produce a new software that is going to benefit your company. The project has a life cycle of 15 years and MARR of 9% Part a.) Draw the cycle cash flow diagram for each vendor. Part b.) Set up the calculation to determine an overall rate of return for each Vendor. Use i* as the ROR in your calculation. Part c.) Determine the ROR for each vendor. HINT: you can use the formulas/tables and guess and check for the interest rate. Vendor M Cost, $ 190,000 30,000 Vendor N Cost, $ Time Frame 258,500 Now Annually 23,000 Task Time Frame Development Operation Now Annually

You are charged with choosing a vendor to produce a new software that is going to benefit your company. The project has a life cycle of 15 years and MARR of 9% Part a.) Draw the cycle cash flow diagram for each vendor. Part b.) Set up the calculation to determine an overall rate of return for each Vendor. Use i* as the ROR in your calculation. Part c.) Determine the ROR for each vendor. HINT: you can use the formulas/tables and guess and check for the interest rate. Vendor M Cost, $ 190,000 30,000 Vendor N Cost, $ Time Frame 258,500 Now Annually 23,000 Task Time Frame Development Operation Now Annually

Computer Networking: A Top-Down Approach (7th Edition)
Computer Networking: A Top-Down Approach (7th Edition)
7th Edition
ISBN:9780133594140
Author:James Kurose, Keith Ross
Publisher:James Kurose, Keith Ross
Chapter1: Computer Networks And The Internet
Section: Chapter Questions
Problem R1RQ: What is the difference between a host and an end system? List several different types of end...
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You are charged with choosing a vendor to produce a new software that is going to benefit your company. The project has a life cycle of 15 years and MARR of 9% Part a.) Draw the cycle cash flow diagram for each vendor. Part b.) Set up the calculation to determine an overall rate of return for each Vendor. Use i* as the ROR in your calculation. Part c.) Determine the ROR for each vendor. HINT: you can use the formulas/tables and guess and check for the interest rate. Vendor N Cost, $ 258,500 23,000 61,000 Task Vendor M Cost, $ 190,000 30,000 55,000 Time Frame Time Frame Now Development Operation Now Annually Annually Annually REVENUE Annually Part d.) Decide which Vendor to choose using an incremental ROR approach.
Transcribed Image Text:You are charged with choosing a vendor to produce a new software that is going to benefit your company. The project has a life cycle of 15 years and MARR of 9% Part a.) Draw the cycle cash flow diagram for each vendor. Part b.) Set up the calculation to determine an overall rate of return for each Vendor. Use i* as the ROR in your calculation. Part c.) Determine the ROR for each vendor. HINT: you can use the formulas/tables and guess and check for the interest rate. Vendor N Cost, $ 258,500 23,000 61,000 Task Vendor M Cost, $ 190,000 30,000 55,000 Time Frame Time Frame Now Development Operation Now Annually Annually Annually REVENUE Annually Part d.) Decide which Vendor to choose using an incremental ROR approach.
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