Team 7 Kevin Colangelo Jeff Ackerman Jake Zander

Team 7 Kevin Colangelo Jeff Ackerman Jake Zander Joe Simmons COMPUTERS: MAKE VS. BUY

SCENARIO You are considering building or buying a new computer and keeping it for at least 2 years The person needs powerful video/gaming capabilities, and high processing power You must weigh the cost of components as well as man hours versus the price of a new computer at a store Maintenance, upgrade costs and warranties must also be considered Is it cost effective to build your own computer?

COMPUTER Cyberpower. PC Gamer Xtreme 2000 Price: $2, 429. 99 Price with two year warranty: $2, 569. 98

COMPUTER SPECS AND PRICES Store PC Components: Separate PC Components: Price: Warranty: Intel Core i 7 940 $564. 99 3 year 6 GB DDR 3 Ram Corsair XMS 3 $154. 00 Lifetime 1 TB HDD Hitachi 0 A 38016 $87. 99 2 year $19. 99 Blue-ray Drive LITE-ON Black $89. 99 2 year $19. 99 DVD Drive Sony Optirac Black $17. 99 2 year $14. 99 Ge. Force GTX 260 (2) $459. 98 Lifetime 1000 W PSU Silverstone 0 P 1000 -E $199. 99 2 year $39. 99 Keyboard / Mouse Microsoft CA 9 -00001 $16. 99 2 year $14. 99 Windows Vista (64 bit) $99. 99 Case Antec 300 $59. 95 Motherboard Gigabyte GA-EX 58 -UDR 3 $199. 99 2 year $39. 99 Total Price: $1951. 85 2 year $149. 94 Total Price w/ warranty: $2101. 79

CASH FLOW DIAGRAM Store bought: $600. 00 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 $10 $10 $10 $10 $10 $10 $2569. 98 24

CASH FLOW DIAGRAM Home built: $250. 00 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 $15 $15 $15 $15 $15 $15 $2101. 79 24

ECONOMIC ANALYSIS Varying MARR Store bought is always preferred at every MARR % MARR Store Home 12% ($2, 169. 88) ($2, 223. 65) 11% ($2, 162. 55) ($2, 222. 79) 10% ($2, 155. 05) ($2, 222. 00) 9% ($2, 147. 38) ($2, 221. 17) 8% ($2, 139. 54) ($2, 220. 30) 7% ($2, 131. 51) ($2, 219. 39) 6% ($2, 123. 31) ($2, 218. 54) 5% ($2, 114. 91) ($2, 217. 44)

MORE ECONOMIC ANALYSIS Changing labor cost on home built At $17 / month the store bought is more attractive Labor cost NPV 15 ($2, 220. 30) 16 ($2, 242. 41) 17 ($2, 264. 52) 18 ($2, 286. 63) 19 ($2, 308. 74) 20 ($2, 330. 85)

EVEN MORE ECONOMIC ANALYSIS Changing interest rates of payments At 21% the home built computer payment is equal to the store computer at 5% Monthly Payment Interest Rate Store Home 12% ($131. 00) ($114. 00) 11% ($130. 00) ($113. 00) 10% ($129. 00) ($112. 00) 9% ($127. 00) ($111. 00) 8% ($126. 00) ($110. 00) 7% ($125. 00) ($109. 00) 6% ($124. 00) ($108. 00) 5% ($123. 00) ($107. 00)

CONCLUSION Home built preferred when: Labor cost is less than $17 / Month Payment interest rate is less than 21% Store At bought preferred when: every MARR % Resources www. newegg. com www. frys. com