Annual Worth AnalysisIn-Class LabAnnual Worth AnalysisIn-Class LabEGR 312-14 (Fall '13)Annual Worth AnalysisIn-Class LabIn this lab you are asked to compare several alternative when starting up a one-person shuttle company.Background: You are planning on starting a shuttle service from Macon to the Atlanta airport. You are considering four alternatives: lease or buy a 9-passenger van; lease or buy a 12-passenger van. The purchase, lease, operating cost, and expected monthly revenues are as follows: 9-passenger 12-passengerBuy Lease Buy Lease Business Startup Costs $ 2,000 $2,000 $ 2,000 $2,000 Vehicle Down Payment $10,000 $2,000 $15,000 $2,500Vehicle Monthly Payment $ 500 $ 750 $ 475 $1,000Monthly Maintenance $ 90 $ 0 $ 105 $ 0 Monthly Revenues $ 5,500 $5,500 $ 5,900 $5,900Monthly Payroll & Ins. $ 4,700 $4,700 $ 4,700 $4,700Life Cycle (years) 4 2 3 2Question 1: Assuming a MARR of 10% per year, what is the payback period (in months)for each option? np(buy 9-passenger) -np(lease 9-passenger) -np(buy 12-passenger) -np(lease 12-passenger) -Question 2: What is the monthly worth (synonymous with annual worth but for a month) of each option?MW (buy 9-passenger) -MW (lease 9-passenger) -MW (buy 12-passenger) -MW (lease 12-passenger) -EGR 312-14 (Fall '13)Annual Worth AnalysisIn-Class LabQuestion 3: From a monthly worth (annual worth) perspective, which option should youchoose?Question 4: If you raised your MARR to 20%, which option should you choose? And Why?Question 5: Assume again a MARR of 10%, if you feel that you may actually obtain revenues of $5700 for the 9-passenger van which option should you choose? And
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