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The engineering team at Manuel’s 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. Manuel’s uses a 4-year planning horizon and a 10% per year MARR.
The engineering team at Manuel’s 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. Manuel’s uses a 4-year planning horizon and a 10% per year MARR.a) What is the discounted payback period of each investment?
b) Which ERP system should Manuel purchase if his decision rule is to select the system with the shortest DPBP?
(a) The discounted payback period ofVendor A is 3.8 yearswhereas forVENDOR B it is 3.7 years.The solution for the above answer is solved below in the image.(b)The ERP system should be purchased fromVENDOR Bbecause it has a shorter payback period.Hence,VENDOR Bis the correct answer for part b.Learn more aboutdiscount payback, refer to:brainly.com/question/25534287#SPJ2...
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