A software developer is planning to develop, produce and sell new security software. The key parameter values of the three software packages under consideration are provided below. Parameters 1. Initial Cost ($) AC 650,000 KLM 740,000 2. Revenues ($) 350,000 at 450,500 at EOY1 EOY1 increasing by decreasing by $4,000 $5,000 annually annually thereafter thereafter Delta 790,000 450,500 at EOY1 increasing by 1% annually to EOY5 inclusively; $470,000 at EOY6 decreasing annually by $2,000 thereafter. 300,000 at EOY1 increasing by 2% annually thereafter 3. Operating costs ($) 180,000 at 252,000 at EOY1 EOY1 increasing by decreasing by 2% annually 1% annually thereafter thereafter 90,000 100,000 120,000 4. End-of-life salvage value ($) 5. Useful life (years) . 5 5 10 All parameter values are fictitious. EOY = End-of-year Industry standard for backhoes = 4 years MARR = 10% . 23. The incremental External Rate of Return (AERR) between the AC and the KLM models. The incremental External Rate of Return (AERR) between the AC and the Delta models. 24. 25. 26. The best software model based on the external rate of return (ERR) criterion. If the company's current software development budget is $1.55 million, which software model() should it purchase assuming that the three software models are independent investments? If the company prefers to develop two software models instead of one in 2020 (that is, one in September and the other in November), which model in Question 26 should it develop in September? 27. A software developer is planning to develop, produce and sell new security software. The key parameter values of the three software packages under consideration are provided below. Parameters 1. Initial Cost ($) AC 650,000 KLM 740,000 2. Revenues ($) 350,000 at 450,500 at EOY1 EOY1 increasing by decreasing by $4,000 $5,000 annually annually thereafter thereafter Delta 790,000 450,500 at EOY1 increasing by 1% annually to EOY5 inclusively; $470,000 at EOY6 decreasing annually by $2,000 thereafter. 300,000 at EOY1 increasing by 2% annually thereafter 3. Operating costs ($) 180,000 at 252,000 at EOY1 EOY1 increasing by decreasing by 2% annually 1% annually thereafter thereafter 90,000 100,000 120,000 4. End-of-life salvage value ($) 5. Useful life (years) . 5 5 10 All parameter values are fictitious. EOY = End-of-year Industry standard for backhoes = 4 years MARR = 10% . 23. The incremental External Rate of Return (AERR) between the AC and the KLM models. The incremental External Rate of Return (AERR) between the AC and the Delta models. 24. 25. 26. The best software model based on the external rate of return (ERR) criterion. If the company's current software development budget is $1.55 million, which software model() should it purchase assuming that the three software models are independent investments? If the company prefers to develop two software models instead of one in 2020 (that is, one in September and the other in November), which model in Question 26 should it develop in September? 27