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Upgrade vs. Purchase: Maximizing Business Efficiency with New Computers

Explore the decision-making process between upgrading current systems and purchasing new computers to serve associates more effectively. Analyze costs, technical specs, warranties, technical support, and present worth considerations. Make an informed choice for enhanced performance.

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Upgrade vs. Purchase: Maximizing Business Efficiency with New Computers

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  1. REFURBISH OR PURCHASE COMPUTERS GROUP #8 • SILVA ISAYAN-ORGANIZER • GERARDO CISNEROS -TECH • MARLON ORTIZ- TECH • JONATHAN LOW-SUMMARIZER

  2. XYZ GRAPHICS DESIGN • WE NEED TO UPDATE OUR COMPUTER SYSTEM IN ORDER TO SERVE OUR ASSOCIATES MORE EFFECTIVELY. OUR CURRENT SYSTEM IS ABOUT 5 YEARS OLD. WE LOOKING FOR MULTIPROCESSOR SYSTEM WITH AT LEAST 2GB MEMORY.

  3. OPTIONS • BUY ALL NEW COMPUTERS WHICH COME WITH UP TO DATE PROGRAMS THAT WE NEED • KEEP THE OLD COMPUTERS AND INSTALL ALL THE PROGRAMS WHICH WE NEED.

  4. Technical Specs

  5. COST • COST OF NEW COMPUTERS HP Workstation

  6. COST • COST OF PROGRAMS TO BE INSTALLED • HARDWARE • SOFTWARE

  7. MAINTENANCE • COST OF LABOR FOR INSTALLATION FOR THE UPGRADE = $8,400.00 • ( which is 336 per unit) • COST OF INSTALLATION FOR THE HP WORK STATION = $0.00 • WARRANTY ( product and service) • Workstation has 6yrs warranty. • Parts for the upgrade have Limited Warranty. (which include manufacturing problems only.) • COST OF TECHNICAL SUPPORT • HP Workstation • comes with 6yrs of support ( online and telephone services) • Last year will have a $199p/m maintenance fee = $2,388.00 • Upgrade Option • $199p/m flat fee technical support for all 7 years= $16,716.00

  8. Present Worth of HP Workstation PWC = 52441.57

  9. Present Worth of Upgrade PWC = 50253.33

  10. Difference

  11. Sensitivity Analysis for New HP Workstation

  12. Sensitivity Analysis for Upgrade

  13. Sensitivity Analysis for Upgrade Down Payment

  14. Observations • With a lower down Payment the Present Worth of each Option Decreases. But there is a much larger increase in the amount in the payments. • A very large distinguisher between both options was the Maintenance fee. • The price of the new workstation is very high • The cost of maintenance of the upgrade option makes it more expensive then the Workstation.

  15. Upgrading Problems • Hire engineers to upgrade • Buy the pieces (software and hardware ext.) • Training for employees • Extra unknown problems

  16. Decision • In the end we decided to go with the HP Workstations because they will be less hazel to fix technical support.

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