Dark Skies Observatory is considering several options to purchase a new deep-space telescope. Revenue would be
generated from the telescope by selling "time and use" slots to various researchers around the world. Four possible
telescopes have been identified in addition to the possibility of not buying a telescope if none are financially
attractive. The table below details the characteristics of each telescope. An external rate of return analysis is to be
performed.
T1
T2
T3
T4
Useful Life
10 years
10 years
10 years
10 years
First Cost
$600,000
$800,000
$470,000
$540,000
Salvage Value
$70,000
$130,000
$65,000
$200,000
Annual Revenue
$400,000
$600,000
$260,000
$320,000
Annual Expenses
$130,000
$270,000
$70,000
$120,000