Hi Anonymous please if you dont mind to print the answer better than write it by hand thanks.
A medium-sized farm in Alberta is considering a new automated irrigation system that relies on advanced sensors and computer-based decisions as a replacement for the current human-based irrigation practices that relies on an experienced grower. The farm has a MARR (Minimum Acceptable Rate of Return) of 7%. The table below summarizes the cost for keeping the experienced grower and the cost to acquire and run the automated irrigation system. Use the information in the table to answer the following questions. Human-Based Automated System System Purchase price of the automated system $135,000 System installation & first time programming $15,000 Salary/year for the experienced grower $40,000 Benefits/year for the experienced grower $3,000 Cost of system re-programming/maintenance $12,000 5 years Planning horizon cost a) If the automated irrigation system is to be re-programmed every year, is it an economic decision to replace the experienced grower with the automated system? (Use Present Worth). (7 Marks) b) If the automated system is to be re-programmed every 2 years, is it an economic decision to replace the experienced grower with the automated system? (Use Present Worth). (7 Marks) c) Redo part a) using Future Worth instead of Present Worth. (6 Marks) d) If the service life of the automated system is 10 years with zero salvage value, for a planning horizon of 10 years, do you expect a different decision for part b)? (Hint: no further calculations needed). (5 Marks) A medium-sized farm in Alberta is considering a new automated irrigation system that relies on advanced sensors and computer-based decisions as a replacement for the current human-based irrigation practices that relies on an experienced grower. The farm has a MARR (Minimum Acceptable Rate of Return) of 7%. The table below summarizes the cost for keeping the experienced grower and the cost to acquire and run the automated irrigation system. Use the information in the table to answer the following questions. Human-Based Automated System System Purchase price of the automated system $135,000 System installation & first time programming $15,000 Salary/year for the experienced grower $40,000 Benefits/year for the experienced grower $3,000 Cost of system re-programming/maintenance $12,000 5 years Planning horizon cost a) If the automated irrigation system is to be re-programmed every year, is it an economic decision to replace the experienced grower with the automated system? (Use Present Worth). (7 Marks) b) If the automated system is to be re-programmed every 2 years, is it an economic decision to replace the experienced grower with the automated system? (Use Present Worth). (7 Marks) c) Redo part a) using Future Worth instead of Present Worth. (6 Marks) d) If the service life of the automated system is 10 years with zero salvage value, for a planning horizon of 10 years, do you expect a different decision for part b)? (Hint: no further calculations needed)
