Calculate the ERR for all three Projects

B. Problems and Questions 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 AC KLM Delta 1. Initial Cost ($) 650,000 740,000 790,000 450,500 at EOY1 350,000 at 450,500 at increasing by 1% EOY1 EOY1 annually to EOY5 increasing by decreasing by inclusively; 2. Revenues ($) $4,000 $5,000 $470,000 at EOY6 annually annually decreasing thereafter thereafter annually by $2,000 thereafter. 180,000 at 252,000 at EOY1 EOY1 300,000 at EOY1 3. Operating costs increasing by decreasing by increasing by 2% ($) 2% annually 1% annually annually thereafter thereafter thereafter 4. End-of-life salvage value ($) 90,000 100,000 120,000 5. Useful life (years) 5 5 10 All parameter values are fictitious. EOY = End-of-year Industry standard for backhoes = 4 years MARR = 10% 1. AC's Net Present Worth (NPW). 2. KLM's Net Future Worth (NFW) at EOY5. 3. Delta's NFW at EOY10. 4. AC's Annual Equivalent Worth (AEW). 5. Delta's AEW over 30 years (it was repeated without changes to its initial parameter values). 6. The best software model based on the net future worth (NFW) criterion. 7. The best software model based on the annual equivalent worth (AEW) criterion. 8. AC's recovery period (years) based on the simple payback method. 9. KLM's "project balance" after 2 years based on the simple payback method. 10. Is the KLM software model acceptable based on the discounted payback method? 11. Delta's "project balance" at EOY3 based on the discounted payback method. 12. The best software model based on the simple payback method. 13. The best software model based on the discounted payback method. 14. KLM's benefit/cost (B/C) ratio. 15. Delta's benefit/cost (B/C) ratio. 16. The incremental B/C ratio between the AC and the KLM models