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 first cost variation: $150,000 to $250,000 (?25% to + 25%).

What will be an ideal response?


P = first cost

PW = -P + (60,000 - 5000)(P/A,10%,5)

= -P + 55,000(3.7908)

= -P + 208,494



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