Regional Express is a small courier service. By introducing a new computerized tracking device, they anticipate some increase in revenue, currently estimated at $2.75 per parcel.
The possible new revenue ranges from $2.95 to $5.00 per parcel with probabilities shown in the table below.
Assuming that Regional's monthly capacity is 60 000 parcels and the monthly operating and maintenance costs are $8000, what is the present worth of the expected revenue over 12 months?
Regional's MARR is 12%, compounded monthly.
|
Revenue per parcel
|
$2.95
|
$3.25
|
$3.50
|
$4.00
|
$5.00
|
|
Probability
|
0.1
|
0.35
|
0.3
|
0.15
|
0.1
|