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Buy vs. Build Desktop Computer: Comparative Analysis for Long-Term Investment Decision

Explore the cost analysis between purchasing a Dell computer versus building a custom desktop PC, analyzing factors like maintenance, upgrades, and warranties for a 4-year lifespan. Sensitivity analysis highlights key thresholds affecting the investment decision. Make an informed choice based on your needs and budget constraints.

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Buy vs. Build Desktop Computer: Comparative Analysis for Long-Term Investment Decision

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  1. Buy vs. BuildDesktop Computer Team 2 Caitlin DeAngelis Raymond Kurniawan Jose Avila Alfonso Rios

  2. Buy Build • Intel Core i7-920 Processor (2.66GHz) • Windows Vista Home Premium • Single 16x DVD Burner • 3GB Ram • 500 GB Hard Drive • ATI Radeon HD 3450 Video Card • Integrated 7.1 Channel Sound Card

  3. Scenario 1 • Compare Dell vs. Custom Built • Useful life of 4 years • Maintenance will remain constant • Upgrade in the third year • Salvage value in year four • No extended warranty

  4. Sensitivity Analysis • Incrementally change the labor cost of the custom built computer • At $100.00 / hr the custom computer EUAC surpassed the Dell

  5. Sensitivity Analysis Incrementally change the maintenance cost If maintenance cost exceeds $333.99 the Dell becomes a better investment

  6. Sensitivity Analysis Incrementally change the upgrade If upgrade cost exceeds $1350 the Dell becomes a better investment

  7. Scenario 2 • Compare Dell vs. Custom Built • Useful life of 4 years • Maintenance will remain constant • Upgrade in the third year • Salvage value in year four • Extended Warranty • Major component failure in the second year

  8. Assuming complete system failure in the second year If the computer will have to be replaced, the Dell becomes a better investment

  9. Conclusion Scenario1 • Initial conditions favor the custom built computer • Sensitivity Analysis shows alternatives Scenario 2 • Initial conditions favor the Dell computer

  10. Resources • Dell.com • Fry’s • Tiger Direct.com

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