An online patient diagnostics system for surgeons has the following point estimates: A first cost of $200,000 to install and $5000 annually to maintain over its expected life of 5 years. Added revenue is estimated to average $60,000 per year. Examine the sensitivity of present worth at a MARR of 10% per year to variation in selected parameter estimates, while others remain constant. Sensitivity to revenue variation: $45,000 to $75,000 (?25% to + 25%).
What will be an ideal response?
R = revenue
PW = -200,000 + R(P/A,10%,5) - 5000(P/A,10%,5)
= -200,000 + R(3.7908) - 5000(3.7908)
= -218,954 + 3.7908R
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