Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dr. Dyson of Cyberdyne Systems has decided to put you in charge of the financial decision of whether to buy or lease servers for the

Dr. Dyson of Cyberdyne Systems has decided to put you in charge of the financial decision of whether to buy or lease servers for the new SAC-NORAD datacenter located in Cheyenne Mountain. He has asked you to consider the servers for a 5-year period, but you do not know exactly how many servers you will need. Initially, you will need five servers, but you might need as many as 50, depending on the success of Skynet. For the buy-alternative calculations, set up your spreadsheet so that you can enter the base price of the server hardware, the price of all software, and a maintenance expense that is some percentage of the hardware price. Assume that the percent covers both hardware and software maintenance. Each server has a 3-year life, after which it has no value. Assume straight-line depreciation for servers used less than 3 years, and that at the end of the 5 years you can sell the servers you have used less than 3 years for their depreciated value. Cyberdyne Systems pays 2 percent interest on capital expenses. The servers Dr. Dyson prefers cost $5,000 each, and the needed software costs $750. The maintenance expense is 3 percent. For the lease-alternative calculations, the leasing vendor will lease the same server hardware you can purchase. The lease includes all the software Cyberdyne Systems will need as well as all maintenance. Set up your spreadsheet so that you can enter various lease costs, which vary according to the number of years of the lease (1, 2, or 3). The cost of a 3-year lease is $285 per server per month, a 2-year lease is $335 per server per month and a 1-year lease is $415 per server per month. The lessor offers a 5 percent discount if Cyberdyne Systems leases from 20 to 30 computers and a 10 percent discount for leases of 31 to 50 computers. Using this base model, Dr. Dyson would like to see calculations based on the following six scenarios so that the best decision can be made for Cyberdyne Systems: Scenario 1: Cyberdyne Systems requires 20 servers for 5 years. Scenario 2: Cyberdyne Systems requires 20 servers for the first 2 years and 40 servers for the next 3 years. Scenario 3: Cyberdyne Systems requires 20 servers for the first 2 years, 40 servers for the next 2 years and 50 servers for the last year. Scenario 4: Cyberdyne Systems requires 10 servers the first year, 20 servers the second year, 30 servers the third year, 40 servers the fourth year and 50 servers the last year. Scenario 5: Cyberdyne Systems requires 10 servers the first year, 20 servers the second year, 30 servers the third year, 40 servers the fourth year and 50 servers the last year, but Dr. Dyson finds a cheaper server that only costs $4,000.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Graph Databases New Opportunities For Connected Data

Authors: Ian Robinson, Jim Webber, Emil Eifrem

2nd Edition

1491930896, 978-1491930892

More Books

Students also viewed these Databases questions

Question

1. Describe the factors that lead to productive conflict

Answered: 1 week ago