You wish to evaluate four independent projects that all have a 10-year life at MARR = 15%

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You wish to evaluate four independent projects that all have a 10-year life at MARR = 15% per year. Preliminary estimates for first cost, annual net income, and SV have been made.

A B D First cost, $ Annual net income, $/year Salvage value, $ -1,200 -2,000 -5,000 -7,000 200 400 1100 1300 5 6.


(a) Accept or reject each project using a present worth analysis. On your spreadsheet, include the logical IF function to make the accept/reject decision.

(b) The preliminary estimates have changed for projects A and B as shown below. Use the same spreadsheet to reevaluate them.

First cost, $ Annual net income, $/year -1,000 -2,200 300 440 Salvage value, $

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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Engineering Economy

ISBN: 978-0073523439

8th edition

Authors: Leland T. Blank, Anthony Tarquin

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