please types the answer by keyboard CaNikon Studios is a small movie production
ID: 2439996 • Letter: P
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CaNikon Studios is a small movie production company that currently uses APS-C sized (Advanced Photo System type-C: 1.6 Crop Factor) image processing sensors to install on its cameras to produce movies. The company's chief engineer, Aaron, suggests that the company could obtain higher image quality and reduce its post-processing costs by $4000 per year if the company switches to the use full-frame (35mm-sized) digital sensors. The board of directors concurs with Aaron to make the switch to full-frame sensors due to their higher image quality when compared to APS-C. After rigorous research, Aaron concludes that the shutter life of full-frame sensors is 7 years with no salvage value. Two suppliers are of interest: Willard, Inc. will provide the sensors in return for 4 beginning-of-year annual payments of $3600 each. On the other hand, Putiyon, Inc. will provide the sensors for an upfront payment of $12250. If the MARR is 8%, which supplier should be selected? Note: Round your answer to the nearest 1.0 percentage point. TTTArial Path: p Words:0Explanation / Answer
Time = 7 years
R = 8%
For Willard Inc. alternative,
Present value of the cost = 3600 + 3600/1.08 + 3600/1.08^2 + 3600/1.08^3
Present value of the cost = 12877.55
For Putiyon Inc. alternative,
Present value of the cost = present value of the investment
Present value of the cost = $12250
Since, the Putiyon Inc. alternative is relatively cost effective between the two alternatives. So, alternative of Putiyon Inc. should be selected.
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