The engineering team at Manuels Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A costs $380,000 initially and is expected to increase revenue $125,000 per year every year. The software and installation from Vendor B costs $280,000 and is expected to increase revenue $95,000 per year. Manuels uses a 4-year planning horizon and a 10% per year MARR.

a) What is the annual worth of each investment?

vendor a:

vendor b:

b)What is the decision rule for determining the preferred investment based on annual worth ranking?

c)Which ERP system should Manuel purchase?