Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 48

A new structural design software package is available for analyzing and designing three-sided guyed towers and three- and four-sided self-supporting towers. A single-user license will cost $6000 per year. A site license has a one-time cost of $22,000. A structural engineering consulting company is trying to decide between two alternatives: buy a single-user license now and one each year for the next 3 years (which will provide 4 years of service), or buy a site license now. Determine which strategy should be adopted at an interest rate of 10% per year for a 4-year planning period using the annual worth method of evaluation.