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Drain Your Brain, a local video arcade, is considering the addition of a new virtual reality system. Several different vendors have been contacted. The owner
Drain Your Brain, a local video arcade, is considering the addition of a new virtual reality system. Several different vendors have been contacted. The owner of the arcade, affectionately referred to by the patrons as Wizard, has narrowed his selection to one of three choices (mutually exclusive alternatives). The data below describes the three systems under evaluation. Annual costs are based on electricity consumed, replacement parts based on use, and preventive maintenance. Revenue estimates are provided by the vendors based on regional data and relative thrill as compared to other arcade games and a cost of $1.00 per play, a. Which method (PW, AW, FW, IRR) would be best (easiest) to use to select the preferred alternative? b. What is the implicit study period for this problem? c. Which alternative should be selected when MARR is 13%? Click the icon to view the datatable for the additional information about three alternatives. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% per year. a. Which method would be best (easiest) to use to select the preferred alternative? O A. IRR OB. AW O C. FW OD. PW b. The implicit study period is years C. AWA=$(Round to the nearest dollar) AW = $(Round to the nearest dollar) AWC=5 (Round to the nearest dollar.) should be selected Initial costs Annual costs Annual revenues Salvage value at end of useful life Useful life System A $14.000 $6,600 $11,000 $1.500 System B $12.000 $5.400 $10.100 $1,500 System C $15.000 $7,300 $12.000 $1,000 6 years 4 years 5 years Print Done
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