Question
You sell computers and are deciding whether to update from Dell Computers to Apple Computers. MARR is 12%. Planning Horizon is 10 years. The upgrade
You sell computers and are deciding whether to update from Dell Computers to Apple Computers. MARR is 12%. Planning Horizon is 10 years. The upgrade from Dell to Apple will give you these things.
- $1,000,000 investment to buy new computers
- Savings going from Dell to Computer is $35000 per year
- buying apple will increase customer number by 5000
- each customer that buys from you has a benefit of $40
- dell computers have a salvage value of $200,000
- apple computers have total salvage value of $150,000
Determine the best alternative using
part a) Internal Rate of Return
part b) External Rate of Return
please solve part a and b using excel
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