Two flight guidance systems are being evaluated for a backup control tower at a local airport. One

Question:

Two flight guidance systems are being evaluated for a backup control tower at a local airport. One system utilizes conventional radar, and the second uses a global positioning system (GPS). The life of both systems is 6 years, and the is 12% per year. Based on the criterion, which guidance system would you recommend?

Radar GPS GPS Capital investment Annual expenses Salvage value $300,000 $450,000 30,000 40,000 80,000

Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...

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