Assessments $$

A company wants to expand internal data storage. Therefore, the owner of the company has entrusted you to decide between building your own data storage server or renting the storage from another company. The details of the cost of both options are as follows:

Option $1.$ building your own data storage server $$

Buy Data Storage Server

Lifetime of Storage Server

A room for placing Data Storage Server

Operating costs $($maintenance$,$ electricity and staff costs$)$

increasing $3,500$ baht per year

System update cost, first time in year $3$ and repeat every $3$ years

After the end of useful life, sell at

$10\%$ of the purchase price

$7,800,000$ Baht

$10$

year

$700,000$ Baht

$550,000$ Baht per year

If sold before expiration, sell for

$150,000$ Baht per time

Cash flow estimates are the same for each life cycle.

If the term of this investment of the project is $16$ years and the expected minimum return $($MARR$)$ is $18\%$ per annum.

What is the net present value $($NPV$,P_{\text{t}\text{o}\text{t}\text{a}\text{l}})$ of option $1?$