Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

question c? please help will give good ratinf Alan Moore runs an Al company that involves 10 giant Behemoth artificial neural network computers. These computers

question c? please help will give good ratinf image text in transcribed
image text in transcribed
Alan Moore runs an Al company that involves 10 giant Behemoth artificial neural network computers. These computers have gotten old and need to be replaced. Mr. Moore is considering two options: 1) replace the existing machines with 10 new and updated Behemoth units (each will cost $800,000 and will not involve any additional operating costs), and 2) purchase 10 new Shikari machines that will cost $1.25 million each and will save $500,000 per year in operator costs. Note that Shikari units will last for 10 years, while Behemoth units are becoming obsolete and will last for 7 years. (a) Based on the internal rate of return (IRR) figures from the table, which machines should Mr. Moore buy, Behemoth or Shikari? Is this decision reliable? If not, why? (20 MARKS) (b) Based on the payback period figures from the table, which machines should Mr. Moore buy, Behemoth or Shikari? Is this decision reliable? If not, why? (20 MARKS) (c) Based on the net present value (NPV) figures from the table, which machines should Mr. Moore buy, Behemoth or Shikari? Is this decision reliable? If not, why? (20 MARKS) (d) Calculate the equivalent annual benefit (or cost) for each group of machines (Behemoth and Shikari). Based on such calculations, which machines should Mr. Moore buy, Behemoth or Shikari? Is this decision reliable? If not, why? (40 MARKS)

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

Public Finance In Theory And Practice

Authors: Holley Ulbrich

2nd Edition

041558597X, 978-0415585972

More Books

Students also viewed these Finance questions

Question

107 MA ammeter 56 resistor ? V voltmeter

Answered: 1 week ago

Question

Generally If Drug A is an inducer of Drug B , Drug B levels will

Answered: 1 week ago