5. The following stages of a project are each contingent upon the preceding stage. If the preceding stage is not performed (accepted), then none of the subsequent stages may be performed.
Stage
Investment
Cost in
Today's $
Revenues in
Today's $
1 A small FCC-licensed commercial radio station
$180,000
$270,000
2 New antenna and hard-line from transmitter
$30,000
$50,000
3 New amplifier to boost from 5,000 watts to 30,000 watts
$40,000
$30,000
4 New lightning-protection equipment
$30,000
$60,000
5 New control console
$15,000
$5,000
a. Remembering that no stages can be skipped, which set of the five stages do you recommend be purchased?
b. Of the ten principles, which one(s) is well illustrated by this problem?
c. Of the systematic economic analysis technique's seven steps, which one(s) is well illustrated by this problem?