Recently introduced Gatorade Endurance Formula contains more electrolytes (such as calcium and magnesium) than the original sports drink formula, thus causing Endurance to taste saltier to some. It is important than the amount of electrolytes be precisely balanced in the manufacturing process. The currently installed system (called EMOST) can be upgraded to monitor the amount more precisely. It costs $12,000 per year for equipment maintenance, $45,000 a year for labor, and the upgrade will cost $25,000 now. This can serve for 10 more years, the expected remaining time the product will be financially successful.

A new system (UPMOST) will also serve for the 10 years and have the following estimated costs. All costs are per year for the indicated time periods.

Equipment: $150,000 years 0 and 1 Development: $120,000 years 1 and 2 Maintain and phaseout EMOST: $20,000 years 1, 2, and 3 Maintain hardware and software: $10,000 years 3 through 10 Personnel costs: $90,000 years 3 through 10 Scrapped formula: $30,000 years 3 through 10 Sales of Gatorade Endurance with the UPMOST system installed are expected to go up by

$150,000 per year beginning in year 3 and increase by $50,000 per year through year 10. Use LCC analysis at an MARR of 20% per year to select the better electrolyte monitoring system.

(Choose from tabulated factors, calculator, or spreadsheet to make your evaluation.)