Reference no: EM131217787
Quail's Gate Winery from West Kelowna in the Okanagan Valley, has a terrible problemwith Grape phylloxera which is a pest that feeds on grapevine's roots and as a consequence deforms these roots and makes them prone to fungal infections. This is extremely dangerous situation for the winery as the pest spreads quickly and is able to destroy all grapevines that are in the proximity to the Quail's Gate estate winery location.Therefore, Quail's Gate owner, Tony Stewart must act quickly.
It looks like the winery has two options:
1. It can buy a drone from Parrot EPA that costs $3000. This is a custom made drone specifically adapted for the purpose of grapes cultivation. It can also detect how much water each grapevine plant needs at a given time.
2. It can buy a drone from Skycatch for $1000. It is not grapes cultivation specific drone, but it can be adapted for the winery's purpose. It can also detect how much water each grapevine plant needs at a given time.
It has been assessed that the introduction of Parrot EPA's drone can allow following cost savings for each of the next 5 years (per year savings):
- Savings of $800 on Grape phylloxera damage
- Savings of $1,000 in water use
It has also been assessed that the introduction of Skycatch's drone can allow following cost savings for each of the next 5 years (per year savings):
- Savings of $100 on Grape phylloxera damage
Savings of $1,000 in water use
Assuming that the rate of discount is at the level of 2.5% which drone should Quail'sGate purchase. Explain clearly why or why not.