Economic Analysis Team ProjectTeam MembersScenario DefenderScenario ChallengerOptional ResourcesEconomic Analysis Team ProjectEconomic Analysis Team ProjectCalifornia State Polytechnic University, PomonaReplacement Analysis (Team 3)Winter Quarter, 2008Repair or Replace Old ComputersTeam Members•Paul S. Cobian -Organizer•Mynor Piedrasanta -Techie•Spencer Lee -SummarizerCalifornia State Polytechnic University, PomonaScenarioDefenderFifty, 5 year old computers are being considered for replacement. They have no present or future salvage value. The current maintenance cost is $10,000 per year, and is expected to increase $2500 per year in future years.**All prices are estimatesBrand new computer can be purchased for $60,000, with the manufacturers warranty covering the first two year’s maintenance and repair costs. In the third year, maintenance costs will be $2,500 per year, and is expected to increase $1,250 per year in the future. They will have a future salvage value of $10,000 in the 5th year.*Using an 8% interest, and replacement analysis technique, determine if a replacement decision should be made. ScenarioChallenger*All prices are estimatesOptional Resources•Contact Computer Vendor for desktop prices–Dell–HP•Discussion with IT Department(s)•Contact credit company for business related loans–Interest
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