CSCI 510, Fall 2015
30 points
The MedFRS project has received two attractive, well-qualified bids to develop, produce, and field test the First Responder Workstations (FRWs), and train the firstresponder personnel in their use. The full delivery of the FRWs is to be at the end of month 20, followed by 4 months of field testing and training.
Company L is a local company familiar with the Ensayo region. It proposes a continuing $25K payment at the beginning of each month to cover all 24 months of the project.
Company M is a major global company. It proposes a $50K initial payment at the beginning of the project, a $450K payment on delivery at the end of month 20, and a
$120K payment for the field testing and training at the end of month 24.
1.
Compute the overall present value of the two bids, assuming an interest rate of 6% per year or 0.5% per month (3 significant digit computations are sufficient). Which bid is lower from the standpoint of total dollars paid out?
Which bid is lower from a present value standpoint at an interest rate of
6%/year?
2.
Name 2 non-dollar factors that might favor going with Company L?
3.
Name 2 non-dollar factors that might favor going with Company M?