The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) syst

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The Engineering Team At Manuel S Manufacturing Inc Is Planning To Purchase An Enterprise Resource Planning Erp Syst 1 (118.57 KiB) Viewed 23 times

The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource planning (ERP) system. The software and installation from Vendor A cost $50,000 initially and is expected to have an annual cash inflow of $10,000. The software and installation from Vendor B cost $75,000 and the annual cash inflow will be $13,500. Manuel's uses a 10-year planning horizon and a 12 percent per year MARR. Based on an incremental external rate of return analysis, which ERP system should Manuel purchase? (Hint: Both alternatives are feasible. Therefore, you do not have to calculate their individual ERR values. You should only calculate the ERR of the difference).