A company's IT department is comparing two technology proposals. Option 1 would retain legacy equipment while Option 2 would replace the existing equipment with a new one. Option 1:

Total operation costs = $400,000 per year Annual storage requirements = $100,000 per year Option 2:

Initial investment = $1,250,000 Recurring annual operation costs = $150,000 per year Annual storage requirements = $100,000 per year The company's write-off costs for the legacy equipment is $50,000. As a business analyst using a TCO analysis, which option would you recommend?

Question

A company's IT department is comparing two technology proposals. Option 1 would retain legacy equipment while Option 2 would replace the existing equipment with a new one. Option 1:

Total operation costs = $400,000 per year Annual storage requirements = $100,000 per year Option 2:

Initial investment = $1,250,000 Recurring annual operation costs = $150,000 per year Annual storage requirements = $100,000 per year The company's write-off costs for the legacy equipment is $50,000. As a business analyst using a TCO analysis, which option would you recommend?

Accepted Answer

A. Option 1 is feasible if the project lifespan is less than 5 years

Answer

B. Option 1 is feasible if the project lifespan is more than 6 years

Answer

C. Options 1 and 2 are feasible if the project lifespan is 5 years

Answer

D. Option 2 is feasible if the project lifespan is less than 5 years

A company's IT department is comparing two technology proposals. Option 1 would retain legacy equipment while Option 2 would replace the existing equipment with a new one. Option 1: Total operation…

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