Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company is building a small datacentre inside one of its existing warehouses. It is considering two different suppliers. Supplier A's equipment will cost
A company is building a small datacentre inside one of its existing warehouses. It is considering two different suppliers. Supplier A's equipment will cost $33,400 to install and Supplier B's will cost $47,500. Both suppliers have guaranteed that their equipment will last 10 years. Given that the machinery will need to be maintained at a certain temperature, cooling costs are a key factor in which machinery will be selected. The cooling cost will depend on temperatures throughout the year and fluctuating energy costs. The probability of annual costs is detailed below. The company has a MARR of 8% and wants to use an IRR analysis. Which supplier should be selected? SUPPLIER A Annual Cost $4,500 $7,000 $8,000 $9,250 Probability 0.10 0.60 0.25 0.05 SUPPLIER B Annual Cost $4,000 $5,275 $6,450 $8,500 Probability 0.20 0.60 0.15 0.05
Step by Step Solution
★★★★★
3.38 Rating (157 Votes )
There are 3 Steps involved in it
Step: 1
WN1 Calculation of the Annual Cooling cost of 2 datacenters Supplier A450...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started