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Business, 04.07.2020 05:01 allsherm23

A medium-size municipality plans to develop a software system to assist in project selection during the next 10 years. A life-cycle cost approach has been used to categorize costs into development, programming, operating, and support costs for each alternative. There are three alternatives under consideration, identified as A (tailored system), B (adapted system), and C (current system). The costs are summarized below. Perform a life-cycle cost analysis to identify the best alternative at 8% per year using: a. Tabulated factors first.
b. A spreadsheet to verify your selection.

Cost Component Cost Estimates
A Development $250,000 now, S150,000 years 1-4
Programming $45,000 now, S35,000 years
Operation $50,000 years 1 through 10
Support $30,000 years 1 through 5
B Development $10,000 now
Programming $45,000 year 0, S30,000 years 1-3
Operation $80,000 years 1 through 10
Support $40,000 years 1 through 10
C Operation $175,000 years 1 through 10

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