1. A municipal police department has decided to acquire an unnamed drone for aerial surveillance of a high-crime region in the city. Two drones are being studied and their data are provided in the table below. All alternatives are expected to have negligible salvage values at the end of 5 years. The police department's MARR is 8% per year. Which drone should be selected based on a. RORAI method? b. Annual Worth method? A Alternative Capital investment $740,000 Annual expenses $ 361,940 Alternative Capital investment 1,840,000 Annual expenses $ 183,810
1. A municipal police department has decided to acquire an unnamed drone for aerial surveillance of a high-crime region in the city. Two drones are being studied and their data are provided in the table below. All alternatives are expected to have negligible salvage values at the end of 5 years. The police department's MARR is 8% per year. Which drone should be selected based on a. RORAI method? b. Annual Worth method? A Alternative Capital investment $740,000 Annual expenses $ 361,940 Alternative Capital investment 1,840,000 Annual expenses $ 183,810
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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A municipal police department has decided to acquire an unnamed drone for aerial surveillance of a high-crime region in the city. Two drones are being studied and their data are provided in the table below. All alternatives are expected to have negligible salvage values at the end of 5 years. The police department's MARR is 8% per year. Which drone should be selected based on
a. RORAI method?
b. Annual Worth method?
A Alternative Capital investment $740,000 Annual expenses $361,940
B
Alternative Capital investment 1,840,000 Annual expenses $ 183,810
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